Rob Wertheimer: Hey, good morning everybody. My question is going to be around your competitive positioning in the 2027 EPA from what you can see today. There’s a bunch of questions we get on whether there’s a prebuy on what the cost increase would be and maybe the warranty should be stripped out of that, I’m not sure. And there may also be more subtle things that you guys would understand better than most of us around how the standards can be met, whether having an additional nat gas where you guys do pretty well can offset other emissions and so forth. So that’s the general question. Price increase, whether share gain and whether there’s any subtleties around your mix in your early preparedness that will help you in 2027 transition? Thanks.
Jennifer Rumsey: Yeah. Great. Thanks for the question. And we are investing, as we’ve talked about in the new HELM engine platforms. And we’re in a unique position because of our scale to continue to invest in what will be market-leading engine solutions to meet those future regulations. And so we expect that, that will provide some advantage for us as we go into those regulations. There will be a dynamic we think that’s going to play out in the 2025 and 2026 time period as end customers anticipate a major regulation change and what that will mean to them. And so we expect that’s going to drive some things beyond the normal cycle in the US truck market. And then as we go into 2017, there’ll be some period of uptake, but we think we’re well-positioned.
Obviously, our position in medium duty has continued to strengthen, and we’ll have a next-generation 15-liter natural gas that will go into the market later this year that is of high interest to some of our customers that have sustainability ambitions and see this as the best way, most cost-effective and reliable way to meet those ambitions and then we’ll have a new high-efficiency 15-liter platform and 10-liter platform as well. So we’re excited about our position with those products and really focused on the execution of development and launching them into the market.
Rob Wertheimer: Okay. Thank you.
Operator: Thank you. Our next question comes from the line of Noah Kaye with Oppenheimer. Please proceed with your question.
Noah Kaye: Thanks. Just sticking with the EPA 2027 for a minute here. If the final rules continue to provide nice crediting of hydrogen trucks. And just given your offerings in this space, wondering if you started to see more of a pickup for hydrogen fuel cell or whether most of the Accelera inbounds at this point are primarily bet?
Jennifer Rumsey: Yeah So if you look beyond even the 2027 into the EPA announced the Phase 3 greenhouse gas regulation, which is going to really start to shape the industry as we get into 2030 and beyond, no major surprises for us with that regulation, but it is really an unprecedented level of ambition and assumptions around zero emissions vehicle penetration. And so the industry and the government is going to have to work really closely together for that to be successful. So to your question, one of the things — there are a few things that we’re pleased about in the regulation. One is it actually recognizes hydrogen engines as a zero-emission solution. So we believe that that will create a space for hydrogen fueled engine that hydrogen fuel cells still are a good solution over time, but the adoption rate on that is likely to be — take some time, I would say.
And then the EPA also did commit to work to streamline hybrid powertrain certification. So hybrid engines, we think, may be an attractive solution because the infrastructure availability is going to be a challenge. So that’s another thing that we’re looking at closely. So there’s still some engine-based solutions. Yes, we’re seeing an uptick today in more of the battery electric powertrain as I noted, and of course, electrolyzers, fuel cells are still a pretty low level.
Noah Kaye: Yeah, makes sense. And then you mentioned that you got regulatory approval for the JV. So just can you lay out for us the game plan on how spending for the gigafactory should proceed over the next couple of years? And what you may be doing at this point in terms of lining up supply and demand for the factory, at least your…?
Jennifer Rumsey: Yeah. I mean the partners have been working together ahead of getting the final regulatory approval we announced that we selected a site earlier this year. So we’ll be — we’re getting a site ready in Mississippi, just outside of Memphis, Tennessee and really starting the work to prepare for supply chain and building the plant. Now that we have regulatory approval, we believe we’ll be able to close and finalize the entity in this quarter. And then we’ll have phased investment as we build the plant and work towards start of production in 2027. And then we’re, of course, sharing this investment of a 21-gigawatt hour plant across the partners and have this design that will allow us to phase in new lines and scale up the plant and production rates based on how we see the industry developing, and we’re still feeling really good about how we’re positioned in the market together with LFP cell that will be designed specifically for the commercial vehicle market and have the ability to leverage some of the incentive money that’s available here to help enable adoption in our commercial vehicle market.
Noah Kaye: Great color. Thanks so much.
Operator: Thank you. Our next question comes from the line of Jamie Cook with Truist Securities. Please proceed with your question.
Jamie Cook: Hi, good morning. So — sorry, I’m managing through like seven calls. I hope this hasn’t been asked. But Mark, the question is to you, I guess, understanding you have your Analyst Day coming up this month. I’m just looking at Cummins and thinking, okay, perhaps there’s a cost story there, you have market share gains that should be helping you may be less spend on Accelera. I’m just wondering, as you think about margins over the medium term, do you think there’s an opportunity to structurally improve incremental margins? Or as you think about sort of the next couple of years, it is more so taking these actions to hit Cummins’ historic targeted incremental margins? And then my second question would be, and if this is addressed, I apologize. Can you just talk to the visibility you have across like in terms of backlog across your portfolio, in particular, for the engine side and the Power Systems side? Thank you.
