So that’s been, that’s been good. And I think they are — ultimately will also help drive the, the long-term aspects, of our order book and contracts as well, respectively with automakers there. And, we said by the end of the decade, ultimately the target would be to get towards, $60 billion, contracts, for the order book which is in terms of the respective opportunity that we have ahead of ourselves by you know capturing what that was like 3% or 4% market penetration. So that that’s something that you know those companies are going to be very helpful to us to be able to help hopefully achieve beyond that.
Joshua Buchalter: And for my follow-up, in the shareholder letter, I think you mentioned you’re on track to achieve a $1 billion of order book growth this year but some of the contracts might slip into next year. Maybe you could elaborate on how much has already been won. I guess how much of that is new versus existing customers and what’s driving, $1 billion was roughly, I believe, what you added last year which, what’s driving, I guess, the bit of a slowdown in the amount of business that you’re signing this year versus last year?
Tom Fennimore: As Josh, look we’re — as we said, in the letter, we’re still on track $1 billion, we do formal tally at end of the year, we kind of don’t it along the way but we already have a few wins in there, some from existing customers, some from new customers. We’ll talk about stuff once our — once our customers are ready to talk about them. So we remain confident that we’re going to get to that billion, we’re sitting here on November 8th, so we have a lot of things already in the year — there’s a few things that we’re hoping to wrap-up here in the few weeks left in the year. Whenever you get to that, there’s always a risk that some things slip, into Q1. But, there’s also a little bit of a cushion in there. So we remain confident in it.
Look, these things that, the longer term opportunity continues to remain and exist. I would say, almost every major automaker is now having serious conversations about implementing, LiDAR technology on their vehicles. It’s a question of when, not if. And the timing of them kind of making these formal awards can be a little lumpy. And so, I wouldn’t read anything in particular to kind of, I would say, an overall, industry slowdown. But I would say, we still remain satisfied with the pace of our commercial activity and discussions, both with new and existing customers.
Joshua Buchalter: Okay. I’ll hop back in the queue. Sorry, Austin, please.
Austin Russell: Yes, I was just going to say one other thing, just as — I’m sure, as you know, Josh but just as a general reminder, the way that we calculate our order is also generally substantially more concerns standard than some of what we’ve seen out there in the broader industry, it’s probably like that, would be multiple of this €“ significant multiple of this, if we did that. But we want to do it right and we want to show really what what’s actually there in the bag and what we can have that clear one-to-one conversion with in revenue over the — relative near term here in terms of opportunity that we have that will obviously start soon — starting to realize with these mobile watches here soon.
Aileen Smith: Next up in our queue from the analyst will be Winnie Dong at Deutsche Bank.
Winnie Dong: I was wondering if you can provide a current update on the TPK facility ramp in China, where that might stand? And then can you just remind us on the target volume and timeline?
Tom Fennimore: Sure. So, I was actually over in China last week spending some time with the TPK team as well as some other customers over there. I would say that things are proceeding very well so far with TPK. You know, we’re starting, right now for Iris +. We’re making those B samples internally at our Orlando manufacturing facility in some time next year we’ll actually transfer production of the C samples to them. And so, we’re starting to ramp that up, buying the necessary equipment, putting in place the necessary clean rooms. And the TPK team is doing a very good job on that. We’ve been pleased so far with the with the TPK relationship. And, I wouldn’t be surprised if that’s something that continues to expand over time.
With regards to timeline they are planning as I said, start C sample production for us in the first part of next year. And then the plan is to have that facility ready for start production by the end of 2025. The initial capacity that we’re planning that out for is about 600,000 units or LiDARs. And, we also have the ability to grow that as we continue to win more business over there.
Winnie Dong: Thank you for the very detailed response. And then I was wondering, if you can elaborate a little bit more on the gross margin improvement headwind that was stated in the shareholder letter, obviously still targeting, gross margin positive in Q4. But I was wondering if you can just elaborate a little bit on, the costs and efforts associated with Iris+ and how that might impact the improvement there?
Tom Fennimore: Yes, sure. And, as a reminder, we’re kind of, launching 2 — 2 major projects at one. One is Iris, where our lead customer is Volvo. That’s what we’re building out our new facility down in Mexico to produce. That’s what we’re, preparing for high volume SOP next year. And I would say, we’re kind of in the tail end of that initial industrialization of that product. And so as we kind of reach that SOP, there’s going to be a fair amount of launch and other related costs that start to come out of the system. We’re doing that. For Iris+ we’re in that B sample phase, right? So we’re making those LiDARs at our advanced manufacturing facility down in Orlando. And what you’re doing during the B phase is you’re kind of, building those LIDARs and then you do a fair amount of testing on them.
And then you kind of have to modify the design as you do that testing and, identify issues. That’s very typical during the B and C sample phase. The issues you encounter, it’s difficult to predict until you actually get them in place. And so, they were a little higher than we were expecting. I think the good news is, is that the team has done a good job of identifying, the necessary modifications we need to make to — to fix them. And so I think we’ve kind of made those. But the cost for that was a little bit higher than we were forecasting. That flows through our COGS line. And so while the Iris industrialization costs are starting to come down, the Iris+ industrialization costs continue to remain high. And we’ll do so until we reach that the SOP for that a little bit behind the Irish for the initial Iris launch.
And so, as you’re kind of industrializing a product, the issues you encounter and the cost to kind of fix those are a little bit unpredictable. And that’s what we found on Iris+ once again, nothing significant there. The team has identified and made the necessary design changes. We need to go through the necessary testing and validation to prove it out. But that’s what kind of happened on the Iris+ side during Q3.
