Now of course, we’ve got 2 bookings coming. We’ve got the halo product, our Sapphire performance car coming imminently going into production in September, first deliveries in early October. And at the same time, going very, very similar time, we’ve got the rear-wheel drive version of our Pure going into production in Arizona in September. And this will be our most affordable and most obtainable variant of the car. So I think we need to watch this space. We’re always willing to adjust to market conditions. I think that’s very important to retain that flexibility. The key is to get product out into the wild in customers’ hands. That’s the best marketing tool we’ve got.
Ronald Jewsikow: Yes, that makes perfect sense to me. And maybe just a quick 1 for Sherry. But on the impairment charges this quarter, does that reflect the latest pricing moves? Or should we think of — what should we think about for LC NRV charges into the third quarter?
Sherry House: It does already contemplate the reinstatement of the original pricing program for the balance of the year.
Operator: Our next question comes from the line of James Picariello with BNP.
James Picariello: Just on gross profit, the — following up on the LC NRV impact, it took another step higher in the second quarter but was not all of the impact this quarter reflecting noncash. So curious what might be unpacked there. And just how do you foresee LC NRV trending through the remainder of the year? And should gross profit per loss, excluding this impact, improve through the remainder of the year?
Sherry House: Yes. So the LC NRV was impacted by the original pricing program. It was also impacted by obsolescence and firm — losses on firm commitments. In terms of the cost of revenue overall, there were some write-offs with respect to inventory. You get things like expired inventory, et cetera. Those are deemed to be more of a one-off nature. You always have some but we thought it was exceptionally high in Q2 was our opinion. So as we go forward, we would expect LC NRV to go down the next 2 quarters. That would be our expectation, and that’s based on really the points that I made that there’s fewer one-offs, that we already have quite a bit of inventory on the books and those would be the major drivers.
James Picariello: I mean, I know it’s tough to say but given the pricing announcements that you’ve recently made, should the gross profit per loss — the gross profit loss per unit improve through the back half?
Sherry House: So we’ve already contemplated the adoption of the original pricing program in the LC NRV.
James Picariello: Okay, all right. And then just 1 last 1 on the commentary regarding the company’s current $6.25 billion in liquidity to sustain the company into early ’25. The implied cash burn rate over the next 7 quarters would be roughly $900 million per quarter. Is there any other way to read into that provided timeline? I mean, I know we won’t get into 2024 guidance right now, but just high level, how should we be thinking about CapEx relative to operating losses, just informing that timeline?
Sherry House: Yes. I think that you’re right, it would go into 2025. We are expecting to go through the launch of the Gravity program. The cash, I think that your estimate is a reasonable one. We have been sharing CapEx all along. I did guide down a bit on CapEx to $1.1 billion to $1.3 billion for the balance of the year, so that gives you a little bit of runway into thinking about the next 2 quarters. As we get closer to the end of the year, I’ll probably guide for 2024 on CapEx.
