Angular 2 Karma Test 'component-name' is not a known element

You can also use NO_ERRORS_SCHEMA

describe('AppComponent', () => {
beforeEach(async(() => {
  TestBed.configureTestingModule({
    declarations: [
      AppComponent
    ],
    schemas: [NO_ERRORS_SCHEMA]
  }).compileComponents();
}));

https://2018.ng-conf.org/mocking-dependencies-angular/

Because in unit tests you want to test the component mostly isolated from other parts of your application, Angular won't add your module's dependencies like components, services, etc. by default. So you need to do that manually in your tests. Basically, you have two options here:

A) Declare the original NavComponent in the test

describe('AppComponent', () => {
  beforeEach(async(() => {
      TestBed.configureTestingModule({
        declarations: [
          AppComponent,
          NavComponent
        ]
      }).compileComponents();
    }));

B) Mock the NavComponent

describe('AppComponent', () => {
  beforeEach(async(() => {
      TestBed.configureTestingModule({
        declarations: [
          AppComponent,
          MockNavComponent
        ]
      }).compileComponents();
    }));

// it(...) test cases 

});

@Component({
  selector: 'app-nav',
  template: ''
})
class MockNavComponent {
}

You'll find more information in the official documentation.

For me importing the component in the parent resolved the issue.

describe('AppComponent', () => {
  beforeEach(async(() => {
      TestBed.configureTestingModule({
        declarations: [
          AppComponent,
          NavComponent
        ]
      }).compileComponents();
    }));

Add this in spec of the parent where this component is used.