Dr. Geeta Gupta-Fisker: Dan, you asked a question about the BOM and you asked a question about supply engagement. So I think what I’m super excited about is learning more and more about EE architecture from Burkhard and how amazing and lean the EE architecture will be. So, I’ll pass on to Burkhard to explain a little bit, and then I’ll jump back in on the BOM.
Dr. Burkhard Huhnke: Let me talk about the central computers. So in original — or in traditional car manufacturers, we have many ECUs, which are now consolidated to just a few. If you imagine how many ECUs need power supply, need packaging, need housing, we can reduce that to just a few. With this saying, the complexity to consolidating into less computers is playing in that advantage, not just in regards to owning the software on one hand side and all the features and functions being implemented in those fewer computers but also reducing the complexity with suppliers, reducing the complexity on cost, reducing the complexity of wiring harness. Just a few centralized computers allow you actually to reduce extremely the cost from components to buying harness to ED&D, and that is we are doing currently consolidating into this new architecture, which really becomes now a software-driven car where we see the future-going.
Specifically for PEAR, it allows us to reduce drastically the BOM cost from the EE architecture, although the complexity of the domain computers are increasing, this is the advantage of the future EE architecture, which we are implementing into the PEAR.
Dr. Geeta Gupta-Fisker: So, Dan, just to highlight between Henrik and Burkhard, overall, the car has a fewer parts whether it’s electrical components or its mechanical components. Less material means less cost, also means that you have less integration, both electrical and hardware, means that your prototyping costs are less, means that your overall — overall complexity is less. So the way we look at PEAR, we are engineering the entire EE architecture in-house. It’s well underway. We are working with — we have identified some of our SOCs already. We have identified what chips we want with respect to infotainment. We are in the process of finalizing ADAS. And then, when it comes to the actual body and chassis, the development is being done in-house completely. We are almost final negotiations when it comes to powertrain. So, we have identified pretty much all long lead commodities and suppliers.
Operator: Our next question is from Itay Michaeli from Citi.
Itay Michaeli: Great. Thanks. Good morning, everybody, and congratulations. Just a couple of quick follow-ups for me. First, hoping you could just talk a little bit about the cadence you expect for gross margin this year. I think you mentioned earlier that, this is a launch year and maybe there’s certain, I guess, treatment of fixed costs. I was hoping if you could elaborate a bit more on the gross margin kind of in year one and year two in terms of the earlier comment.
Dr. Geeta Gupta-Fisker: Itay, I’m not generally giving guidance for ’24, sorry, is that the question? Are you asking me — okay. So, the gross margin, I’ve given this on an annual basis, not giving guidance on a quarterly basis.
Itay Michaeli: Got it. And I guess, would there be different treatment of certain costs next year? I just want to elaborate if there’s a comment you made around — sort of the gross margin treatment initially in the launch year.
Dr. Geeta Gupta-Fisker: No, because we don’t have our own factory, as I explained. All the costs we have are amortized over the period of time. We haven’t determined whether the life of those tools is 7 or 10 years. That’s still to be determined as we get into sales. But I don’t see minor launch costs, but I would not — if you’re putting a model together, I would not simulate it based on other vertically integrated EVs.
