Dan Levy: Got it. And then as a follow-up, I wanted to just go to the question on sourcing that’s been asked in the past. And I think one of the commentary that we heard from some of your OEM customers is that with a lighter EV outlook, this may change the way they are thinking about vertical integration within EVs, EV components, et cetera. Are you seeing any impact in your discussions on the automakers that previously may have been a bit more keen on vertical integration that are now realizing maybe they don’t have a scale at this level of volumes that are more willing to engage with you as a partner on the EV powertrain components that they need?
Frederic Lissalde: Dan, we’re starting seeing that. And as you mentioned, I think this makes sense. We have a very solid and recognized portfolio. We’re already incumbent at many customers, and we have the financial strength to support them. So I would not call it a trend, but I would say that we’re seeing beginnings of discussion along those lines. And I would say that the major onboard charger business that we have announced today that we booked with a global North American OEM is a sign of that.
Operator: Your next question comes from James Picariello with BNP Paribas.
James Picariello: Can you just put a finer point on what the potential range in margin benefit could be associated with the lower eProduct revenue now slated for 2025? Because they should lead to additional ICE and hybrid business, assuming there’s a decent overlap in your customer bases on both sides of the propulsion mix?
Kevin Nowlan: We’re not prepared to address a specific margin in 2025. I think we showed you, though, the long-term trajectory of what it could look like as you head out to 2030. We tend to think that we’re going to operate into the mid-9s trending towards 10% margin as we look through our planning horizon and then being plus or minus that depending on where the ePropulsion markets actually go. But not prepared at this point to comment on ’25.
James Picariello: Okay. And then just on this year’s guidance, we could, of course, quantify the impact to lower eProducts for you. But just high level, what else is driving the lower growth of the market because it cuts about 4 points? Like what element of this could be attributed to lower recoveries due to lower inflation versus customer and regional mix factors?
Kevin Nowlan: Yes. I mean, overall, as we’ve talked about in the past, we’re really focused on the organic growth. And before, we were guiding to 12% to 15% effectively, and now we’re at 12% to 14%. So we feel pretty good about that. The biggest driver of the drop in revenue and any of outgrowth math that you would do is really that $300 million drop in the eProducts revenue outlook. We have also factored in some element of the impact of the UAW strike that we’ve incurred to date and assume that, that doesn’t recover through the end of the year. It’s less than $100 million, but it’s still an impact on the company and embedded in the numbers as well.
Operator: Your next question comes from Joseph Spak with UBS.
Joseph Spak: Kevin, maybe just to follow up on that. That $100 million, that’s a fourth quarter impact on the strike or a full year impact?
Kevin Nowlan: Both. It’s less than $100 million, but it’s still an impact on the guide. But it’s in the fourth quarter. We didn’t really have any impact — any material impact in Q3.
Joseph Spak: Okay. And then I just want to circle back to sort of this whole slower eProducts ramp and the path to profitability. Like it seems like — and you’ve communicated that a lot of your launches are in China, a lot of new business in China, where we really aren’t seeing some of that slower growth. Obviously, there’s some lower volume with some North American products. But I guess, I’m wondering why there would be such a meaningful impact to the profitability ramp, if that is the case. Or are you also sort of taking a more cautious view on some of the the pace of those Chinese and Asian ramps or — and maybe some challenges given the quantity of the ramps and making sure you execute all those flawlessly?
Frederic Lissalde: Joe, I think there is a difference between what we see in fine-tuning the timing of launches and ramp-up and overall, what you see in the Chinese market — what you can read in the Chinese market. And so the impact of a quarter delay in a launch is 100% of impact in the quarter. And so that’s why it’s a little volatile. That’s what I would tell you. This is what we see on the ground with slightly slower ramp-up and a few programs that are delayed by a few months.
Kevin Nowlan: Joe, just to add to that. I mean, yes, as you look at — we’re still in the early days of growth from an electrification perspective at BorgWarner. And so those quarterly moves right now, until we get to more scale, have a significant impact. And as you look at right now through really 2025, maybe even into 2026, it’s a big ramp-up phase for BorgWarner while we’re still at a relatively modest level of revenue. And so some of those movements in launches and ramp-up timing can have a meaningful impact on the numbers in a quarter or for a particular year.
Joseph Spak: And maybe just to follow up then, like of the reduction to the ’25 eProducts, can you give us a sense regionally of where that’s coming from? Is it predominantly North America and maybe a little bit of Europe? Or is it broad strokes across all the launches?
Kevin Nowlan: In terms of the $300 million, you’re saying?
Joseph Spak: Yes, exactly — no, in the ’25 — reductions in the ’25.
Kevin Nowlan: It’s really across regions. I mean, we’ve gone back and, as Fred mentioned, taken a look program by program and looked at what we think the cadence is likely to be for some of those launches in light of some of the things that we’re seeing in terms of near-term headwinds. And as we look at that and assess what we think the likely ramp up is, we think it probably puts us more on track towards that $5 billion level. But as Fred also indicated, the reason we’re giving a range now as we’ve layered on an incremental risk to say what if there are further delays, particularly on the ePropulsion portfolio in terms of those launches getting delayed another X number of months. And that’s what we’ve layered on to get to the $4.5 billion as a downside to that range.
Operator: We have time for one final question, and that question comes from Noah Kaye with Oppenheimer.
Noah Kaye: Just first, wondering to follow up on that one, if we can get color. Just on the product mix in terms of programs being delayed or pushed out, if we think about the product mix for ’25 in the adjusted revenue number, does this still skew heavily towards power electronics — does it skew even more so? Is power electronics less represented versus some of the other programs? I’m just trying to understand where in the portfolio you’re expecting relatively strong sell-through.
