Tom Narayan: Got it. And just a quick follow up maybe on some of the other opportunities could include M&A. I know, I think there was a question earlier on capital return. And we’ve heard this theme with, I think, Tier 1 and Tier 2 suppliers, potentially there could be some M&A in 2024. One obstacle is obviously interest rates. Just curious if you were to pursue this and you’ve had some really successful M&A in the past, where would they be? And what are some of the kind of — are there opportunities you find attractive currently?
Joe Massaro: Yeah. I mean, like we’ve always said, the pipeline is very full. We maintain it on a regular basis. Certainly, don’t see anything from a capital markets perspective that would preclude us from doing transactions. I think the balance sheet is in very good shape. We took a lot of care over the last couple of years to push out the tenor of the debt and such. So, I feel like we’re in good shape from that. So, we’re certainly not one of the ones that’s raised any concerns on that side. I think you’d continue to see us do things like we’ve done in the past, right? You’d have both for AS&UX and SPS, there are bolt-on opportunities, things that enhance technology, regional presence in AS&UX, there certainly are some opportunities.
It would obviously be smaller than Wind River, but continue to invest in our software capabilities. And then there’s the adjacent markets, right? We’ve done a very nice job over the last couple of years — excuse me, of growing our adjacent market presence, both organically and inorganically. And it’s been accretive to growth rates, it’s been accretive to margins, and I continue to expect us to do something like that.
Tom Narayan: Got it. Thanks.
Operator: Okay. And our next question is going to come from Emmanuel Rosner. Please go ahead.
Emmanuel Rosner: Thank you very much. So, I appreciate the update on the new growth over market framework. I was hoping, since it’s essentially a refresh of a framework, if you could take a step back and maybe remind us the various components or drivers of the expected growth over market, not necessarily just 2024, just as part of the framework, either in terms of how much growth over market comes from each component or in terms of revenue growth, whatever is easier? And is high voltage the only thing that is essentially lower down versus the previous framework?
Joe Massaro: Yeah. The walk — we won’t go into more components than we’ve laid out, Emmanuel. I think the walk sort of indicates within the range, certainly, the largest piece not to come back is the high voltage, right? You could have — again, and it’s a long-term forecasting range, you could have a little bit of movement in customer mix and just how things play out relative to Kevin’s comments on the Japanese OEMs and the China mix. I think speaking to Kevin’s comments, our growth rate, other than EV, which we talked about coming down to 20% from the 30%, our growth rate has been what we’ve expected, right? I mean, we’ve hit our revenue numbers, we’ve hit our growth rates. Our product lines are growing. There is a denominator element here to what we’re seeing take place in the market, particularly in 2023, with the Japanese OEMs up plus 25% round numbers production in North America.
So clearly, I’ve talked about HV slowing down. I think we’ve been transparent about that. But I just want to be clear, this isn’t — we’re missing our growth numbers or we’re missing our revenue numbers. This growth over market, a big piece of that is coming from what I’ll call the denominator impact. I don’t know, Kevin, if you have anything to add.
Kevin Clark: No, you’ve covered it.
Emmanuel Rosner: Okay. And then, one additional clarification on Motional, please. Can you just explain a little bit the mechanics of what you will essentially try to achieve? So, skipping no further funding rounds, is your JV partner okay to fund it? Because I believe there is a need for funding in the fairly near term. So, will that be covered by them at least in the interim? And then, will you be looking at other options on a go-forward basis? You spoke about uncertainty around the timing, but I’m not sure how much of it is already decided. And it’s a timing question versus things that still need to be negotiated.
Joe Massaro: Yeah. No, as I said, we have to work through. Obviously, we have a JV construct. I won’t comment for others involved in the joint venture. Aptiv’s intention is to no longer participate in funding. And within the constructs of the joint venture agreement, we are looking at opportunities to reduce our holdings of the common stock, and that work is in process now. Just given the nature of transactions like this and the fact that we’re working within a joint venture agreement, we felt it was prudent to put the full Motional impact into the guide versus trying to take an educated guess at when something may complete. But obviously working through that now, but the funding decision has been made.
Emmanuel Rosner: Understood. Thank you.
Operator: And this will be our last question, and it is going to come from Adam Jonas from Morgan Stanley.
Adam Jonas: Hi, thanks for taking the questions. It’s been a good call. How much of your CapEx and R&D is being spent to support full BEV architectures?
Kevin Clark: In terms of total advanced engineering, which is the closest development, which you know, Adam, which is roughly 25% of our total engineering spend, we would say somewhere between 5% and 10% would be BEV related, electrification related, I should say.
Adam Jonas: All right. Thanks, Kevin. And just again, I know the negotiations are ongoing, but anything to call out in terms of a breakup or walkaway fee, or I’d say at a high level, could investors anticipate the potential among your range of scenarios to have a potential payment to wind up your involvement with Motional?
Joe Massaro: No, there’s no such requirements in the joint venture agreement, and we wouldn’t expect to sign up for anything like that.
Adam Jonas: Okay. Thanks, everybody.
Joe Massaro: Great. Thanks, Adam. Is that the final question?
Operator: And [that concludes] (ph) today’s questions and answers, and I’ll turn it back over to Kevin Clark. Please go ahead.
Kevin Clark: Great. Thank you, operator. Thank you, everybody, for your time today. Have a nice rest of the day. Take care.
Operator: And this concludes today’s call. Thank you for your participation. You may now disconnect.
