Unidentified Analyst: Okay. I appreciate that. And then just in terms of the New Power business, have you seen acceleration in the recent months following the IRA in terms of customer interest there? And does that possible acceleration in the market change your view on when we could be breakeven in that business?
Jennifer Rumsey: Yes. How I would describe it is, the inflation reduction act and the investments around that are really going to be key to enable the adoption rate that we anticipate is going to drive an acceleration in hydrogen investment. The details around that investment are being clarified right now. So, it’s going to take several years before you really see that translate into actual projects and business. Definitely, it’s going to drive growth in the hydrogen market in the U.S. between now and 2030 as that — as those incentives come in place to both put the hydrogen production in place as well as drive adoption of some of these technologies, which today, frankly, just cost more. So, you need those incentives in order to start to drive customer adoption and bring down the costs and make them more viable in the market.
I mean, in the short run, we’re investing more because we’re building up capacity as are others in the industry. So, the faster we go in the short run could consume more cash. But obviously, we want the market to move, and we expect to deliver good gross margins once we get this kind of investment phase. So, it could go faster. It’s quite a long incubation period, so very different from, say, our on-highway engine business, while we take an order. And then typically, we’re shipping in a few weeks. It’s not been that typical in the last 12 months versus sometimes more than a year between headline announcements to actually putting equipment into place and sometimes even more than a year. But we are encouraged, strong adoption for our technology, and yes, business is doing well on the business development side.
Operator: We’re showing time for one final question today. The final question is coming from Michael Feniger of Bank of America. Please go ahead.
Michael Feniger: When we look at China revenue, the consolidated plus JV in 2022, it’s basically the lowest it’s been over three, four years. I think slightly below 2019. I’m just curious, in those three years, how profitability looks maybe post some restructuring optimization? If units in China recover, are you more profitable in each of those units than maybe you were in the past?
Mark Smith: Well, what’s happening over time is that the content is going up, right? So, one thing that’s been a big positive for our business is China consistently adopting more advanced emission standards. So the amount of revenue that we’re selling is going up per vehicle quite significantly over time. And certainly, cycle over cycle, it’s billions of dollars of extra revenue growth a year. We’re just at the lowest market in a decade. So, we agree that that growth rate is modest. We don’t have any signs yet of a rapid adoption. We’ll be looking at the same data you’re looking at, and obviously, taken on board the feedback from our customers, but we are profitable in our operations. We don’t disclose profitability by region, but for sure, when China volumes improve, our profits will go up.
Michael Feniger: Thank you. And we’ve seen quite a few emerging suppliers in the EV, e-mobility space really struggled in the last 12 months with deliveries or profitability. Do you see some of those dynamics driving OEM conversations back to you and traditional suppliers as we start looking ahead to some of these key dates and trying to adopt more of this altered powertrain?
Jennifer Rumsey: Yes. We talked about this in our Analyst Day about a year ago. We expect that this transition is going to take a long time for our industry, and that positions incumbents like Cummins well because you need to invest for the long term. Regardless of what our customers are adopting, we’ve got the solution in our portfolio. And so for sure, you see the benefit of a company like us that has a portfolio of options to meet their needs, it’s going to be around for the long term and continuing to invest in some of these new technologies, be able to do that and support the product as an advantage, and it’s playing out to be more of an advantage as time goes on compared to some of the new entrants. We continue to pay attention to those new entrants though and how they advance the technology and work to enter the market. So, we wouldn’t discount them, but certainly, this long investment period makes it more challenging for them to stay in and be successful.
Mark Smith: And I think also our footprint, our reputation for dependability, wherever our customers operate, is leading us to be approached in new segments by global large industrial players. So, it’s not just in the market that we operate in today, we’ve been approached to expand into different market applications. That’s particularly exciting.
Operator: At this time, I’d like to turn the floor back over to Mr. Clulow for closing comments.
Chris Clulow: Thank you all for your participation today. That concludes our teleconference. I really appreciate the interest. And as always, the Investor Relations team will be available for questions after the call this afternoon. Take care.
Operator: Ladies and gentlemen, thank you for your participation and interest in today’s conference. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.
