But, yes, you raise a very, very important point. There’s still a lot of issues that are potentially going to impact the penetration of EVs. Just the grid itself, the charging systems, the battery technology, the raw material cost. Can the OEMs make money at this or not? But when it’s all said and done, it’s going to come down to consumer affordability. And right now, the average electrification price for a vehicle is $66,000, which is beyond where the mass market is. And that’s why we’ve got to be smart about looking at what these adoption rates are going to be end of volume penetration.
Operator: And our next question comes from James Picariello from BNP Paribas.
James Picariello: Hi, guys. Just on the key customer downtime late in the first quarter. Clearly, it seems as though you guys were able to navigate it pretty well. Well, and I know you touched on these factors, but what would you attribute to that performance to manage that disruption and then relative to your expectation for the first quarter’s margins to trend sequentially, flat or worse? What was the biggest, clearest, favorable surprise on that?
Christopher May : Yes, in terms of the quarter, in that performance bucket that was asked earlier, 10% to 20% of that I would call year-over-year bridge is associated with performance impacts from that volatility in terms of dimensionalizing some of that inside the quarter. And look, what I’ll tell you, James, is continuing to be nimble with production schedules. It’s a challenge. You see it dragging through some of our performance in these year-over-year walks, but trying to be nimble, trying to have good communication with customers and flexing as quick as you can speed matters in this game, and managing inventories properly as well. So it’s a lot to handle. And obviously, it’s not optimizing our performance. So that’s why we see some upside in the future when things stabilize.
James Picariello: Got it. And I know you called out some launch costs set up for the second quarter, just in terms of the margin cadence for the year, should we assume steady profitability improvement through the year?
Christopher May : Yes, our guidance would indicate, that’s correct. But again, we’ll have some launch costs here inside of the second quarter and recoveries from customers on some of those discussions are a little back weighted towards the second half of the year versus the first half.
James Picariello: Got it. And my last one is just congrats on the Stellantis award. Will this cover the nameplate’s entire production or could it be variant specific?
David Dauch: It’ll cover the nameplate production at the same time, there could be derivatives that’s going to be dependent upon where Stellantis goes with the product. Clearly, we’ll be able to adapt and adjust to their market needs. But we also have other products in our portfolio based on what they may be looking for.
Operator: And ladies and gentlemen, with that we’ll be concluding today’s question-and-answer session. I’d like to turn the floor back over to David Lim for any closing remarks.
David Lim: Thank you, Jamie. And we thank all of you who have participated on this call and appreciate your interest in AAM. We certainly look forward to talking with you in the future. Thank you. Have a good weekend.
Operator: And ladies and gentlemen, with that will conclude today’s conference call. We do thank you for joining. You may now disconnect your lines.
