MAGNA INTERNATIONAL INC

Our Research and Development Process

Our R&D activities take place at our Division/Operating Group level and at the corporate level. Our Divisional/Operating Groups work with our customers to identify product and technology gaps. Magna’s Corporate R&D team, under the global direction of our Senior Vice President, Corporate R&D, analyzes the key megatrends that are expected to drive future mobility and automotive development. As part of these efforts, our Corporate R&D team engages with the advanced engineering and product development teams of our current and potential OEM customers to understand their product strategies and better align our own product strategy and technology development with customer needs.

All of our R&D projects follow an Innovation Development Process (IDP) process – a multi-stage process aimed at turning ideas into innovations that can ultimately be commercialized and scaled. The initial phase of the process is designed to foster the generation of ideas and includes, among other things: identification, understanding of and analysis of societal, digital, demographic, regulatory, industry and other trends which may create demand for and thus drive development of new automotive and mobility technologies; review of academic research; collecting and screening ideas submitted through innovation programs; review of emerging technologies innon-automotive industries; and automotive customer input.

Concepts that progress past this initial stage are further evaluated, including with respect to: fit with our strategy regarding electrification, autonomy, new mobility, vehicle connectivity and advanced manufacturing; commercialization potential; and risks and challenges to further development. Selected innovations then progress through subsequent stages towards product or process realization, validation and eventually, product launch.

Our R&D initiatives are supported by and involve close collaboration with our Corporate R&D group. Our Division/Operating Group R&D teams work together with our Corporate R&D group on technology development, and where necessary specific working groups are established to discuss and develop technological solutions.

As a result of our innovation activities, we have developed a number of product, process and materials innovations, some of which are described in this Section 7 under “Innovations and Innovation Awards”.

As a key part of our own innovation efforts and to gain further access to innovative thinking outside of our company, we partner with start-ups and early stage companies, inventors, entrepreneurs, universities, technical institutions, and the venture capital community to help bring innovative ideas to market. We also look for the best ideas from other industries and apply them to mobility – a process we call “auto-qualifying”. As part of our continuing efforts to develop innovative solutions to the technology challenges of new mobility and the automotive industry, in the last year we have considered thousands of potential innovations, which has led to several active projects. Such projects include: development of Driver Monitoring Systems and ADAS features; efficiency and performance technologies related to electric drives and power electronics; and advanced robotics, inspection systems, Digital Twin/simulation and data analytics technologies supporting our strategic focus on operational excellence.

As an example of our collaborative product innovation process in action – in 2023, we joined NorthStar – Telia Sweden and Ericsson’s 5G innovation program for industrial enterprises. As part of the agreement, Telia and Ericsson have built a dedicated, private 5G network at Magna’s test track located in Vårgårda, Sweden, where new cutting-edge ADAS solutions invehicle-to-vehicle (V2V) andvehicle-to-everything (V2X) connectivity are being trialed. As part of NorthStar, Magna will have access to 5G millimeter wave (mmWave) technology, enabling low latency gigabit speeds and seamless connectivity for new ADAS trials. Additionally, the use of mmWave technology enables ongoing research into joint sensing and communication systems. Leveraging the 26GHz frequency band and 400MHz bandwidth, this network is crucial for Magna’s driving automation and driver support systems, which rely on real-time data from vehicle sensors. Fast network speeds and quick response times are essential for timely alerts to drivers, preventing accidents, and minimizing their impact.