Joe Massaro: Yeah, I’d start with — I mean, there is — again we say — as Kevin mentioned, I’ve attended most of them, supplier meetings in CES. There was no automotive chip provider at the moment that’s talking about price downs. We still have a couple that are talking about increased prices based on wafer cost increases that they’re seeing. We’ll obviously push back hard on those and deal with them if and when they come in. But we’re not seeing anything from a price down perspective, nor would expect it. So, at this point, there’s nothing in there from an opportunities perspective in the guide. Listen, as it relates to peso, last year, we were obviously hit well above $100 million by transaction and translation impacts, right, the FX moving significantly.
This year, and I mentioned this in my prepared comments, Dan, we’ve assumed a stronger peso, basically in the underlying forecast, right, which makes our peso denominated cost more expensive. So, if you look at that bridge, it’s not showing up on the FX line because it’s now forecasted at that level. But you do have about $100 million round numbers going into primarily labor, going into the cost structure, which would appear in that other bucket. And it’s really the amount that’s rolling through into my 2025 comments.
Dan Levy: Great. Thank you…
Joe Massaro: Hey, peso — sorry, go ahead.
Dan Levy: Go ahead, please.
Joe Massaro: I was just going to say peso assumption, just to remind folks, at Investor Day was 20.50, so you got about 10%-plus strengthening in the peso. Go ahead, Dan, sorry.
Dan Levy: Great. Thank you. Just as a follow up, I want to go back to the bookings, and appreciate another strong year of bookings, another outlook. Maybe we could just — and I think this touches on some of the prior questions, just reconcile the strong bookings with seemingly commentary from the OEMs on just reduced gross spend in a variety of areas. I mean, I think we hear about EVs most notably, but even just some of the challenges or push out in executing software-defined vehicle or active safety. We saw there was a large OEM that pushed out one of their advanced ADAS programs. So, maybe you could reconcile the strong bookings activity with some of the challenges that the automakers have faced just broadly on executing on megatrends.
Kevin Clark: Yeah. Dan, I’ll take it. Listen, it’s an interesting question, right? The question we get two years ago was kind of reconcile strong bookings with OEMs, comments regarding insourcing, all their activities. And I think now you hear from OEMs, and we experience directly first-hand all the challenges associated with attempting to do things that either you don’t have the history of doing or don’t have the capabilities, which quite frankly has presented perfect opportunities for us. And it’s the reason why we’ve invested in the areas that we’ve invested in. It’s reason why we’re building kind of full platform solutions that are open, that are scalable, that provide flexibility and importantly lower cost. We fully recognize that, that we need to deliver lower cost options and solutions to our customers all the way from software and hardware development to delivery of a solution, and that’s what we’re focused on.
And I would say that’s the reason for the trend in bookings, that you’ve seen, a value proposition that economically makes sense for our customers as well as it does for Aptiv. And then, you augment that with the question about SoC material inflation, just to underscore Joe’s point, we’ve not heard that from any of our western SoC suppliers. In fact, some are talking about additional constraints beginning in late 2025, going into 2026. So, we have deployed engineering assets in doing a couple of things. One, dual validating or qualifying additional alternatives, so there’s more flexibility to move from one chip to another and bringing that to our OEM customers as a part of our overall value proposition. In my comments, I talked about the 12 Chinese SoC suppliers who we’re working closely with in making significant traction in the China market, with, we believe, meaningful opportunities outside of China, especially in Europe, providing lower cost at roughly equal performance.
And that goes from SoC technologies to radar technologies to peripherals. And by virtue of providing, again, like I said, those leading technologies in a more cost-effective way that again provide flexibility and choice to our customers, that holistic package is attractive, and it helps solve the challenges that you’re aware of that they’re dealing with.
Dan Levy: Great. Thank you.
Operator: Your next question is going to come from Tom Narayan from RBC. Please go ahead.
Tom Narayan: Hey, thanks for taking my question. Maybe one on Motional. I understand that the industry is kind of capitulating on Level 4, but we’d just love to hear kind of your thoughts on this seemingly very promising enterprise, very long term, I understand, but what specifically kind of has changed your thoughts? Is it just the fact that the industry is moving — the market is moving away from it, and maybe financing using capital markets is difficult, or is there something more fundamental that you’re not liking about this Level 4 business?
Kevin Clark: Yeah, it’s Kevin. Listen, we should start with, Motional is on track to deliver the tech roadmap that’s been laid out, and should underscore that HMG has been an absolutely outstanding partner. Better than — as optimistic as we were at the start, even better as a partner from both operational and a strategic standpoint. Commercialization of the technology, i.e., the cost related to delivering the tech principally in and around hardware, really makes it challenging from an adoption standpoint, in the mobility on demand market. And as a result, kind of pushes out ultimately the revenue stream and the earnings stream for the business, and pushes out to a point where relative to other options or opportunities that we have to invest in that will deliver profitable growth, we had to make decisions.
And again, a tough decision, but given where we sit today, given the benefit that we’ve gotten to date, which is real, which is in and around advanced ADAS solutions, and we’ll work to continue to work with Motional commercially in and around bringing their technology into our ADAS platform, but when we look at ongoing funding of the technology and when it actually gets adopted in the mobility on demand market, it’s just pushed too far out to make financial sense for us, given the other opportunities that we have in front of us.
