Chad Dillard: Hi, good morning, everyone. So I was hoping you could talk about the, your industry view on the first half versus the second half like production cadence just given that there are a number of crosscurrents with the car pre buy well — kind of demand. So there’s like how should we think about that production level?
Preston Feight: Well, I think that, again, I’ll come back to the, for our sector. We as an industry have not built enough trucks over the past few years. And that combined with excellent new trucks that provide really good operating cost advantage to our customers, is incentive for them to continue to buy trucks. I think that the pre buy for 2024 is a non-issue. It’s too limited and really only California. And customers end up benefiting in most cases when we bring in new products because we bring them features and content and advantages that help them run their operations better. But I think that when we think about the year it feels steady and strong throughout.
Chad Dillard: That’s helpful. And then just over to your EV offering. Can you just talk about what the composition of production is for this year and then how has the passage of the Inflation Reduction Act just changed like the conversations that you’re having with customers? And ultimately, how are you seeing that translate into your demand curve shift in production?
Preston Feight: Yes, I’ll take a couple of comments within and Harrie or someone can add in. What we see is I think what we’ve shared before and it’s coming true is that we think that the EV market, the zero-emissions vehicle market will just gradually grow. Customers are experimenting with it now trying to understand it, they’re buying chargers putting an infrastructure around it. PACCAR has nine electric vehicle models in production, nine. So our teams have done a fantastic job of putting the products out there for customers to get used to and applications that fit all their needs. And we think it’ll grow as we’ve shared previously; we think it’ll be in the hundreds, and it’ll stay in the hundreds for a little while. And then as regulations come in, and experiences become more familiar, it’ll grow and turn into the 1000s and extend from there.
So I think that at the moment, it’s in the hundreds, and we’re well positioned for that growth. And we have some fantastic vehicles out there that are providing great experiences. Anything to add, Harrie?
Harrie Schippers : No. I think that’s spot on.
Operator: Our next question comes from Rob Wertheimer from Melius Research.
Rob Wertheimer: Thank you. Preston, you mentioned a couple of times how the industry has been tight. Obviously with COVID over the past couple of years and customers haven’t been able to get all the trucks they want. Are you able to split that in North America at all into sort of the straight truck category versus more fleet trucks? Presumably the Infrastructure Act will drive demand for cement and dump and things like that. I don’t know if that’s happening already. If you’re seeing any early orders, or if that’s more of a €˜24 effect, and I don’t know how the fleet age and tightness on that side of the market compares with the more trade markets.
Preston Feight: Yes, Rob, it is an issue we need to think about it, I think what we’ve seen is generally strengthen both sides, truck and tractor. Obviously, it’s, there’s local market impacts there, but the total general statement would be strong demand for trucks and strong demand for tractors.
Harrie Schippers : And I would add, if anything, industry truck segment, PACCAR has a market share of more than 40%. So any growth accelerated growth in that area, Kenworth and Peterbilt will definitely benefit from that.
