But progress being made. It’s not only going to be contactors, right? So there are other applications that we’re serving that are EV specific. As you know, around breaking, around tire pressure around environmental control that opportunities for us. Good progress there. Our goal, as we’ve talked about, have doubled the EV content by 2026 on a global basis. When you look across the globe by 2026, based upon where we are today, North America will be above that 2x. China will be approaching the 2x. And then Europe, I think, will be the one that will be not far behind, but we’ll be accelerating to get there to create the average of 2x across the Company. So continued progress, more to come in terms of specific MBO wins in that area.
Luke Junk: And just a follow-up in the near term, if I look back to compared in the business in 2019, I think you said about $10 million in lost revenue in North America. Just hoping you could bridge that to the $40 million or so you’re expecting this year, just trying to see if there is something in terms of what’s going on in the channel or just generally how this strike is different from the Sensata’s point, given unit impacts aren’t as meaningfully differently?
Jacob Sayer: You’re trying to reference back to the prior the UAW struck in 2021? Is that the question, Luke?
Luke Junk: Yes. The 2019 strike, you had cited about $10 million in lost revenue China that average $35 million to $40 million right now, given that the number of units are pretty similar, Yes.
Jeffrey Cote: Yes. So listen, I mean we’re — in our $40 million impact, we’re looking at what IHS says ultimately the impact will be. As I mentioned, that ties pretty closely what the order rates are and where we are in a fill rate. I think we’re 90%, 91% filled against the forecasting we have. That’s pretty typical and that too is normalizing. So I feel as though it’s a pretty good estimate. I think that how — I mean, I think the union has dealt with this one under Shawn Fain’s leadership has been anything consistent with the past. And so we’re falling based upon the production rates. The fact that they have 10 agreements, obviously very positive. But we’ll watch closely the start-up to see whether or not we have that full $40 million impact or how that transitions as we go throughout the year.
So — but yes, that’s the math on the production rates, which is about — remember, we had talked about $7 million to $8 million per week if everything is shut down. So we’re at the point where it’s a little less than half the full quarter impact if everything had been shut down for the full quarter.
Operator: Our next question today comes from William Stein with Truist. Please go ahead.
William Stein: Great. Thanks for taking my questions. Thanks specifically to Paul. It’s been great working with you over the last few years. And I have a question for Brian.
Paul Vasington: Thank you, William.
William Stein: Yes. I do have a question for Brian. I’m wondering if you can share with us any initial thoughts you have on the Company and specifically what you think your priorities are likely to be in the near and longer term?
Brian Roberts: So I’m about an hour and a half in, so a little bit more time to be able to truly digest. But I guess I would say what brought me to Sensata. I’m certainly very excited about the core business and the Electrification trend that exists. Watching the Investor Day back in September, certainly thinking that those targets that were laid out are achievable and really, Paul has developed a great team and there’s a great management team here that I get to work with. More to come over the coming months, but I’m excited to be here.
William Stein: Great. And I think this question was just asked, perhaps in a slightly different way, but I’m hoping Jeff, perhaps you can discuss the variability of your position across the local China EV compass. It’s one thing about 1.2x the content of a local ICE, but where we, as investors, can often get into trouble is you quote statistics and they may be very correct relative to where you have design wins, but there is an issue relative to the breadth sometimes, where maybe you’re not making an explicit bet but where you wind up getting bigger content wins, those OEMs might not achieve the same growth or the growth they aspire to and others where you don’t have as much print position might wind up ramping. And so I’m hoping you can address the variability from OEM to OEM in China. Maybe what percentage of them you’re working with? And how that 1.25x content varies from OEM to OEM?
Jeffrey Cote: Yes. So you’re absolutely right that the mix of the business matters and engaging with the winners matters. And that’s candidly never been more challenging given the disruption that is occurring in the automotive market. And so from an EV specific standpoint, it’s very clear right now, that the two global leaders are Tesla and BYD. We’re very well positioned with Tesla for very broadly. And they’re above our average net revenue per vehicle. So that’s a very good thing. BYD, I feel as though we’re very well positioned also, but the challenge with BYD is they are vertically integrated from an Electrification-specific component standpoint. We’re working with them very closely. To your broader question regarding China OEMs, we’ve cast that very wide in terms of who we’re working with.
I think clearly, we could say the top five local Chinese OEMs, we have good relationships with, but there are a lot of Chinese OEMs. So I can’t definitively say that we’re working with all of them, but I feel as though we’re well positioned with the ones that are gaining market share. And the big question that we’re grappling with as it relates specifically to China, is when will that consolidation happen and where will the consolidation happen. And so I personally don’t think that’s going to happen anytime soon. But the evidence of who the winners will be not only in the Chinese market, but potentially in the global market is starting to develop in terms of share that’s being accumulated. And that’s where we’re focused. As we continue to focus the strategy and make sure that we’re working with the folks that we know will be the winners, that’s where we’re making sure that we continue to win with the players that have experience behind them that demonstrates that.
To the specific point of the 1.2x, that’s year-to-date in 2023, when you look at collectively all of our revenue with local Chinese makers and you split that between combustion engine platforms and EV platforms, that’s the mix. When you look at the content or the revenue per vehicle on ICE, it’s about 20% and you look at the the EV makers, it’s 1.25x that. But we will continue to monitor it and our goal would be to make sure we accelerate that, given 35% of the vehicles produced in China this year are going to be new energy vehicles.
Operator: And our next question comes from Shreyas Patil with Wolf Research.
Shreyas Patil: Thanks, Paul, for all the help over the years. Maybe coming back to the EV targets. So you’ve talked about strong on North American OEMs. But the ones we are — but they are the ones where we are seeing planned push-outs and where prior expectations appear to be evolving are really the biggest with the North American automakers. For example, GM previously talked about adding 600,000 units of EV large truck capacity by next year and the entire industry should have been targeting something like 1.5 million units in that area by 2026. The entire market for large trucks is about 2.7 million. So it does appear that there could be changes to those expectations. I guess what I’m asking is if that were to happen, would that create an outsized headwind to Sensata?
