Aptiv PLC (APTV) Earnings Call Transcript & Summary

Yes. Good morning, everyone. I'm Brian Gesuale, senior analyst covering the industrial tech and automotive technology sector for Raymond James. Thank you so much for joining us. We're delighted to have Aptiv here, a company that is exceptionally well positioned to benefit as technology enables cars to become safer, greener and more connected. We have the company's Chief Technology Officer, Glen De Vos; and Elena Rosman, Vice President of Investor Relations, here to answer questions. We are going to do this in a fireside chat format. And if you have any questions from the audience, you're welcome to e-mail me and we'll see if we can work it into the program this morning. But again, thank you, Glen and Elena, for joining us.

Thank you for having us.

Yes. Well, let's just jump right into some of the Q&A here. Let's start off with really just level setting the audience. We think Aptiv is arguably as well positioned as any company to capitalize on major automotive technology themes of increasing safety, connectivity and more green vehicles. Would you help maybe frame the business size in those major areas, talk about the thematic growth rates that you're seeing and then also remind investors about the size and parts of the business that are much more market volume or SAAR dependent and how that business is looking to grow over the next few years as well?

Yes. Why don't I kick it off? And then, Glen, feel free to chime in. Yes, I would start by just saying, for those of you that are not as familiar with Aptiv, our mission of enabling a safer, greener and more connected world has never had more meaning, I think, than it does today. Certainly, the pandemic has led to a much broader perspective on how the global community views these megatrends. And in some areas, we've actually seen an acceleration in the adoption of these new technologies, namely in and around vehicle electrification. So maybe I'd start by saying we have 2 segments. We refer to Advanced Safety and User Experience as the brain and our Signal and Power Solutions segment as the nervous system, which when combined together really uniquely position us to provide a full-stack system solution with capabilities in power and data, compute, perception systems and software. So for us, that's really the value proposition. I think Glen will -- can elaborate a little bit more in terms of how we can really help our OEM customers balance the trade-offs between all of those and really provide a cost-optimized system with the highest level of performance. So maybe just framing the size of our business, so the brain piece of the business, our AS & UX segment represents about $4 billion of revenue, while Signal and Power Solutions for this fiscal year 2020, using our latest guidance that we published at the end of October, is roughly $9 billion of revenue. So we're going to see relatively similar growth over market this year in both segments. In AS & UX, it's largely driven by our Active Safety and User Experience product lines. So again, a reminder, our Active Safety business is going to generate roughly $1.3 billion of revenue in 2020. And that's growing, obviously, in excess of about 20 points over vehicle -- underlying vehicle production. And we have forecasted that we expect that Active Safety business to grow at about a 25% CAGR through 2022, so really a business that's roughly $2 billion in size by 2022. Signal and Power Solutions, again, a high single-digit growth over market for the year. Contributions coming from our fastest-growing product line, that being high-voltage electrification. High-voltage electrification will be $500 million of revenue in 2020 and is expected to grow at a 40% CAGR, so call it roughly $1 billion in revenue by 2022. And when you look at the acceleration that we're seeing that we obviously would expect to see the continued strong growth to continue beyond 2022, but those are really the points that we've communicated thus far. And then I guess I would comment on high voltage that a lot of that opportunity near term, I would say roughly 80% of where we've seen that opportunity really lies in Europe and in China. And I think beyond 2022, to the extent that we continue to see traction in North America, that obviously would provide upside to the upper end of our growth over market targets as that's not currently sort of in -- baked into the bookings trajectory at this point. But the other area of growth I would point to is a couple within Signal and Power Solutions. One is in our nonautomotive end markets. So again, today, we're -- roughly 85% of Aptiv is tied to light vehicle production as an underlying macro trend. And about 15% of that is nonautomotive. So the target that we've talked about previously of getting about 15% to about 25% by 2025. And then just in general, within our base Signal and Power Solutions business, right, that business is benefiting from all of the content growth that's going into vehicle architecture in and around safety and the power and data systems connectivity. And so that's also a tailwind for growth over market. So we feel really good about our ability to maintain this long-term framework of 6 to 8 points of market outgrowth, certainly heading into 2021 and looking beyond that. And feel free, I don't know, Glen, if you have anything else you would add to that specifically. I think you might be on mute, Glen.

Thanks, Elena. I think as you pointed out, those megatrends of safe, green and connected, we've talked about in about 10 years. And we're certainly seeing today this continued acceleration back to safety growth and adoption rates. And now -- I mean just a tremendous acceleration of electrification broadly speaking. And then with that as well, connectivity continuing to become more and more ubiquitous with the vehicle with the advent of 5G on the horizon, a bigger pipeline going into the car and more connected cars. And all of that adds up to more and more content flowing into the car, more software. And what's exciting for us and what's unique about Aptiv is with that brain and nervous system capability that Elena talked about, we're able to look at the vehicle much more holistically than a traditional component supplier would be able to where you're looking just at one piece of the vehicle. We're looking at everything from sensor to cloud and, in doing that, able to bring solutions to our customers on how to optimize vehicle architectures, how to optimize these systems so that they can lower total cost of ownership and total cost of production for those vehicles. As one thing COVID has brought to light is, is you have to be very thoughtful about where do you make your investments, how do you deploy your capital. We're able to help OEMs to do that in a more effective way, looking at the complete vehicle architecture. So I think you'll see as a continuing theme in the discussions today about we're able to identify where value can be created, where we have a right to play on that vehicle because of that holistic perspective, that brain and nervous system capability. So looking forward to the discussions today.

Great. That's very helpful. Let's kind of continue along that theme of electric vehicles. There's been just a lot of interest in the acceleration of market growth there, Aptiv clearly extremely well positioned. I think really over the last year, you've increased your penetration rate assumptions for EVs. Really, what are the biggest drivers of that acceleration? What regions drive growth? I know Elena mentioned North -- or China and Europe. But when you build your bottoms-up forecast, what underpins your confidence? Is it bookings? Is it potential pipeline, obviously, your win rates? Maybe talk about all of those things within the context of the EV market.

Sure. Maybe I could start and then, Glen, if you want to talk more about the complementary aspects. But as I mentioned before, right, electrification is one of those areas that we've seen increased levels of OEM interest and part driven by regulatory requirements but as well as just more broad consumer preference. So again, it's a product line for us. It will be roughly $500 million in revenue this year, growing at about a 40% CAGR. And that is driven by -- and when we forecast out to 2022, that business is largely already in hand, right? That's business we booked. We've been booking roughly $2 billion a year of high-voltage revenues. And specifically, I'm talking about the revenues that are going -- that are specific to the high-voltage components, not for a vehicle that is a battery electric vehicle. So in some cases, we might be providing, for example, low-voltage system on a battery electric vehicle. That would be part of our core business in Signal and Power Solutions. What we're really carving out here is the high-voltage wiring, busbars, high-voltage connectors, the onboard chargers and some of those specific components in and around that secondary high-voltage system. So for us, again, what gives us confidence is the rate that we've seen in bookings. I would say from a strategic perspective, we've been very focused on quoting and really winning with OEMs who will be arguably the bigger volume producers of high-voltage electric vehicles. And so when you think about where we have more exposure, you look at OEMs like Tesla, like VW, Volvo. In China, we tend to be a bit more weighted to the global joint venture partners versus some of the locals, but we also have some smaller wins with some of the new emerging, new energy vehicle players like Rivian and a number of others. So we've talked a little bit about the strength of our win rate. I would say the opportunities that we have quoted, certainly in the last year, have gone up dramatically. So we used to quote, I would say a couple of years ago, about 15 opportunities annually. Now we are in the neighborhood of quoting on roughly 40. And again, our win rate has been roughly 70% on that business that we've been very focused and targeted in terms of pursuing. Maybe Glen, do you want to talk a little bit more about our -- the complementary nature of the product portfolio?

Sure. Yes. I [indiscernible] and that's a key point. If you think about the broader trend in electrification [indiscernible] for those products, when you look at the high-voltage piece of it, it [indiscernible] a low voltage. And so whether it's connection systems or it's wiring distribution or some of the newer technologies around busbars or splices and things that we can bring, it really builds on that foundation. So we already have in place this global footprint, this global engineering capability and capacity that can support OEMs as needed. And then by looking at the architecture, by looking at all the different pieces that go into a high-voltage architecture for the vehicle, we're able to then bring that to bear, help them optimize. And some of our recent wins have been primarily due to the fact that because of that system's capability, we're able to significantly drive down their system pricing through optimization of how the technologies are using, the number of splices, things as detailed as that, to where in a recent activity or recent call, we were able to actually drive it 40% below where they thought they needed to be based on our competition. So it's having that capability in place already and -- really positions us well for now attacking that high-voltage space. And as Elena said, we're very targeted. We're very thoughtful about who we work with and how -- what those pursuits mean so that we win with winners. And we win with people that have very coherent and very well thought out and meaningful high-voltage and electrification strategies, so going across many, many platforms looking globally and that's been really successful. And I think that's what the numbers bear out. Adjacent to that, though, what's really kind of an additional benefit is, as we move towards BEV, so full electrification, it opens up the door to rethink low-voltage architectures and to move towards more centralized compute, more up-integration on the low-voltage side as well, which is, again, plays to another strength that Aptiv has. We've been investing in central domain controllers, centralized compute over the past 10 years. And so as you go full electric, you're able to optimize not just the high voltage but the full voltage architecture as well. So that brings an additional opportunity for us, one that we're really excited about.

Great. Yes, the win rates have been really gaudy. The market's really growing, and I think your full offering really provides a benefit to Aptiv. If we take a step back and really just think about the technology that's going into this, would you help the investors understand how the Signal and Power product mix might be different in an electric vehicle versus a combustion engine? And really, I think you highlighted some of the competitive dynamics and how they might differ, but can you talk about where we might think about some market share down the road as we go up 3, 4, 5 years and really just overall, what you're doing in the EV versus the combustion engine market?

Glen, do you want to start? Or I'm happy to maybe just -- maybe I'll start and just level set in terms of where we are in terms of content per vehicle.

Yes.

So for a midsized passenger vehicle on an internal combustion engine, we've got content in Signal and Power Solutions, an addressable market of roughly $500 per vehicle. Whereas on a full battery electric vehicle, it's an upwards of $1,000. And so what happens when you look at adding on that secondary system, which, again, I mentioned, the combination of high-voltage cables, connectors, busbars and charging -- cable sets and charging inlets, that's what gives you that higher addressable market for a full battery electric vehicle. Glen, maybe if you want to talk a little bit about our right to play and, again, you can elaborate a little bit more in terms of that technology differences between low voltage and high voltage.

Sure. In terms of right to play, if you think about the portfolio that we have currently with high voltage, so that's all the power distribution, that's our distribution control, that's inlet charging, that's also upward charge -- the inlet. That's also upward charging. And then connectors that basically interconnect at each point in the system. Think about connecting from the charger, from the inlet to the battery -- to the converters, converters, et cetera, through the battery. We're at all of those connection points. And so that puts us in a really, really good position to understand that system. And I mentioned earlier then, that's where we can bring value. We can look at that system and then optimize. We can optimize with our latest splice technology, our form busbar technologies, our advanced connection system technologies to then really lower that total system cost and weight. And so by having all of those pieces, that really puts us in that -- gives us that right to play and then right to system optimize. And then the foundation that we talked about in terms of the low-voltage foundation, that when you think about it, it's really many, many of the same technologies, how you're moving -- you're still moving power, you're moving data, you're moving a lot of the same signal around the vehicle, connection systems, power distribution and architecture. And so by already being incumbent on versus 1 out of every 4 vehicles, that helps us then build on top of that, what I was mentioning earlier. So for us, stepping into high-voltage is moving from a position of strength to another position of strength. It gives us a great point of attack to go after those opportunities. And that's really been kind of the cornerstone of the strategy.

That's great. I mean we've covered a lot of really important concepts here with content and addressable market and the overall market growth. Would you take us through maybe a specific Aptiv example with the customer, whether you want to kind of talk about what's happened with Tesla or VW or really take your choice? But just help -- help people understand how all of those key components kind of come in to win and create business for you.

Sure. I'll talk about one of the wins we had with a European OEM, where they had already done the predevelopment with one of our competitors. In terms of setting up, this is really the high-voltage side of the electrical architecture and that would be everything from inlet to motor and battery included. And so they had an existing architecture. And basically, what we were able to do is we came in and optimized that system. So we -- where they had cabling with bundled wires, we were able to substitute for busbars, so much simpler, much more effective, much more efficient; where we were able to use aluminum conductors, in some cases, to be able to drive weight of the conductor down. So we're able to convert from copper over to aluminum. Using some of our advanced splicing technologies, we're able to significantly reduce the complexity and the number of splices. This is a really expensive part of electrical architecture, we have to join all of the conductors together and the wires together. So we are significantly able to reduce that. And then we were able to look at the whole system just overall in simplifying some areas. And really, what it allowed us to do is take out 30%, 40% of the cost of the system and the weight of the system for that OEM. And so that was a case where, normally, in our industry, if you do the predevelopment contract with the OEM, you set the -- you basically are setting the requirements. You're proving out you can do the business. More than likely, you're going to get the production business. In this case, we came in, displaced that, that would-be incumbent and then basically took over that business and now we're bridging to all the adjacent platforms from that. So it was a great example for us where we were able to bring connection systems together, our wiring and electrical architecture team together as well as our electronics team to look at the overall electronics architecture, bring that together and really drive value for the end customer.

That's fascinating. Let's zoom out of the EV market a little bit, and then I want to zoom back into active safety. But would you talk about maybe your long-term growth over market objectives? I know you touched on that in the beginning and really how we expect the next year or 2 to play out. I'd also like to kind of appreciate that geographically, I think Europe has been the strongest growth above market in '20, followed by China, but North America has really accelerated as we got to the fourth quarter. How do you see the regions developing from that growth perspective over market over the next year or 2?

Yes. Brian, yes. So as I referenced in the opening comments, our long-term framework for 6 to 8 points of growth over market, we talked about that as being consistent with our planning framework for 2021. We would expect to see, and this is obviously, again, my comments are dated as of our October 29 earnings release. But understandably, thinking about the market growing somewhere around a 10% level over 2020, a large part of that would be theoretically, the absence of the shutdowns that we had and the degree of the shutdowns that we had in 2020, giving you some market growth and then maybe one or a couple of points on top of that in terms of actual demand growth. And then on top of that, call it, 10% market growth level, 6 to 8 points of market outgrowth. But if you look within the regions, so we haven't given any further color or degree of specifics as it relates to 2021. But if you look at the trends that we've seen by region in growth over market, we have had, to your point, we've actually had several, I think, we're on 7 consecutive quarters of double-digit market outgrowth in Europe. That's largely been driven by the -- our launch volume cadence in and around Aptiv safety and high-voltage electrification. We don't expect it to continue at double-digit rates. But again, any quarter, things can move and shift depending upon launch cadence and timing and certainly year-over-year comparability. Within China, we typically run in that 6 to 8 points growth over market range. Again, we tend to be weighted to -- we're about 70% with the global joint venture partners and about 30% with the locals. So that has a significant impact on -- depending upon what part of the market is growing, that can obviously impact our growth over our market, again, within the quarters. But from a long-term perspective, we would stay pretty much within that range. And in North America, yes, as you mentioned, we do see some reacceleration of growth over market in North America tied to -- specifically to some launch volumes we have in Aptiv safety in the fourth -- that start in the fourth quarter. So we've mentioned before in active safety, we've had -- we're launching 5 Satellite Architecture programs between 2020 and 2021. So again, some of those have benefited earlier in the [ CR ] China and Europe, and now we're going to start to see that benefit flow through in North America as well. So again, it's -- sometimes I tend to look at it on a 2-year stack basis because I think, again, within the quarters, things can certainly shift and move around a bit, but we're very confident in that 6- to 8-point market outgrowth formula, at least going forward-looking at 2021 and probably beyond that as well.

Yes. That's great color. I really appreciate that. Let's go dig into another one of these [ juicy ] themes, the transition to and move on to active safety. If the EV market has accelerated in its adoption, I think the assumption for Level 3 or 4 autonomous has slid a little bit to the right. Can you help us understand maybe how you see that market playing out from a technology standpoint, from Level 2, 2+ and 3, and really maybe how we should think about some upcoming launches and when we might be able to see meaningful pipeline developed for Level 3 and 4 from a booking standpoint?

Sure. Yes, Elena, I can start, and then feel free to add any comments.

Perfect.

Yes. Level 3 has moved down. I think as the OEMs have really gotten into the development of that, understood the complexities involved, the regulatory environment, et cetera, you have seen it shifting out of that 1 or 2 years. I'll come back to timing for that in just a second. But in the meantime, we've seen very strong pull for Level 1, 2 and 2+ systems. These are all systems that offer both a tremendous value proposition to the end consumer as well as a really nice margin performance for the OEMs. So they're differentiating option content that they're going to offer their customers at great margins. And as a result, you've got the regulatory pull, you've got the market pull and the rebuy rates. These are very sticky. So there's about a 95% ADAS option rebuy rate, so people that have ADAS features don't buy cars without them again. And with all of that, that's really pulling through that acceleration on ADAS. For us, as Elena mentioned, this year and next, we really will launch the 5 Satellite Architecture systems. And up until about 2017 when we launched Audi zFAS, ADAS was a component market, smart sensors or cameras and radar, but all discrete complements. With [ '17 ] in the launch of Audi zFAS, that really was the transition to systems, so providing ADAS systems to the central compute Satellite Architecture sensors. And that's what these 5 systems now, what we refer to is really our first-generation of ADAS platforms or Satellite Architecture platform, and that's what's launching now, so that's going to provide that acceleration. With those launching, what that means is what we're pivoting now is, well, what's the next generation? And so for us, to continue that growth, it's really -- what's key is 2 things: one, leveraging our incumbency position on those 5 big programs as well as our broader component business, so how do we leverage that really strong incumbency position. Because once you're in on an ADAS platform, it is a very -- it's a good place to be with an OEM, but you got to bring more value. So how does that next-generation system then really allow us to bring more value to those customers, accelerate the capability and the performance of those systems and really drive, again, to Level 2, Level 2+ and ultimately, Level 3? Where we see Level 3 going is the OEMs are still very interested in Level 3. It offers a tremendous value to the end customer, but it's got to be at the right [ level ]. It's got to have the right performance level. And so we've seen some, as we said, moving to the right on that in terms of timing, 1, 1.5, 2 years, so we're really seeing that kind of now coming in, in the '24, '25 kind of time frame, maybe '26. And so still some questions on exact timing on those. But from our perspective, there's still a very strong commitment on the -- within the OEM community to be able to offer those Level 3 systems. There's a tremendous interest there, but they've got to be at the right price point. The regulatory environment has to be there. It has to have the right level of performance, and they're just not really there yet today.

Great. That makes a lot of sense and very consistent with what we're seeing. Maybe we could talk a little bit about some of those content per vehicle opportunities in active safety. How does your role in your content increase maybe at each point as we move from 0 to 3, 0 to 4? And how do you see really share develop as you start to think about this over a 3-, 4-, 5-year time period?

Yes. Maybe I can start, Glen, if that's okay, on content and -- I think it's also worth mentioning sort of where the market is from a penetration perspective. So today, you see largely penetration of Level 0 through Level 2, 2+ systems about 50%, expected to reach about 60% by 2022 and 70% by 2025, so higher than even what we would have assumed previously. And we're probably thinking that penetration by 2025 is going to be closer to 55%. So we are seeing an increase in certainly the regulatory side for ADAS features across the regions that translates into more demand for higher level, Level 2, Level 2+ solution. And you think about Europe acquiring automatic emergency braking, lane-keeping assist on all new vehicles by 2022. The U.S., right, continue to see that the 20-plus automakers voluntarily committed to making automatic emergency braking standard equipment by 2022. And then both Europe and China on NCAP have continued to toughen some of their safety protocols. So again, it, from just a penetration market perspective, continues to be a very attractive space. Again, maybe just a little bit. Of the 50% of the market that is penetrated, the majority of that -- so 35% of the total market is in some form of -- 35% of the market, sorry, in the form of some Level 0, Level 1 application. Again, for us, that's addressable content opportunity of a couple of hundred dollars in that range, $250, call it, to $300, depending upon the configuration and whether it's in combination of the sensing modality, compute and software components. When you move up to a Level 2 system, so again, that's going to be additional sensors, additional compute, additional sensor fusion on the software side, you're now talking about content per vehicle in the range of about $500 per vehicle. A Level 2+ system then grows, in excess, you're probably closer to about $750 to $1,000 of content. And again, as a reminder, Level 2+ system is today not very penetrated within the market. So Level 2, Level 2+ combined today is about 15% of the market. We're expecting that to grow to about 25% of the market by 2025. And then that sort of cosmic leap to Level 3, you're really talking in upwards of $3,000 of content per vehicle, depending upon, again, the sensor configuration. But now you're including the lighter modality, much bigger compute and software piece of that, as Glen sort of referenced before.

Yes. As you go to the Level 3, you really step into -- it's a different level of content because of the fail-operational capability, the car is in control. So localization, like I said, the redundancies, it adds a significant amount of cost in content and complexity. But that's what we're working through.

Is it really the software element of complexity? Is it the sensor costs or capabilities that's pushing Level 3 out a little bit more? Is it a combination of all? I know you -- it's probably a little bit of everything, but how do you think about that?

It's really all 3. It's -- you're -- with the car and control, you need a much more sophisticated sensor or perception system around the car. That's where we think LiDAR is required in addition to vision and radar. So you need a much better perception system capability. Perception drives compute. And so that means you now have to, in the car, build a much more sophisticated or complex environmental model, so what the car sees around it. And that's all compute, and that's all software. So that drives up that piece -- that dimension of the complexity. And then on top of that, you have to have fail-operational capabilities. So that means you have redundancy, duplication of systems and subsystems, steering, braking, power. So they're -- and compute. So you have now a whole another layer of hardware in the system as well that has to be managed and then also has to be present on the vehicle. So that adds content and costs. And then overlaying all of this, of course, is the regulatory environment. So you have to manage through that. So it's, in order of magnitude, more complex when you add it all up than a Level 2+ system, which is why it costs so much more today. But as I mentioned earlier, there still appears to be a very strong market pull as well as a strong desire from the OEMs to be able to offer vehicles with those features. And over time, those costs will come down. There's no question. We'll continue to optimize to where it can become commercially very attractive. And so that's the challenge for the industry. But as I mentioned earlier, that's -- we're very focused on how do we make that happen.

Yes. No, that's great. I want to kind of rapid-fire just a couple of technology questions at you so investors can maybe understand your build versus buy approach and maybe your partner ecosystem a bit. And so maybe you just take us through who you partner with or whether you build internally and where you see this kind of fitting out between 0 to 4 for cameras and radar and LiDAR and thermal, if necessary, as you move in. We hear different things there. And then maybe end with your Motional partnership.

Sure. So on the build versus buy, I'll kind of -- let me just go through the different sensing modalities. So on vision, we've been a Mobileye partner for some time now. We vertically integrate and build on the camera side. So on that piece of it and on the image processing piece of it, we manage that, but we work with Mobileye and their EyeQ family in terms of the vision processing part. And that's been, I think, a really successful partnership for us because it's allowed us, did not have to make all the investments in doing vision systems. We can take advantage of what Mobileye -- the great work Mobileye has done. For radar, that's where we're totally vertically integrated. And so we have a long history working with radar all the way back 20-plus years ago with Hughes Electronics and the first radar introduced for Jaguar Adaptive Cruise Control. So we have a long and storied history on radar. That's one where there aren't a lot of suppliers doing radar. If we want to do radar, we're doing it ourselves, and we continue to invest in that with our whole next generation of technologies, both corner radar, midrange as well as long-range radar. So we think radar is a sensing modality that is really, really critical. On our Satellite Architecture programs, for example, those have 5 radar and then 1 camera. So when you think about radar providing a 360 view, it's really an effective sensing modality for us. We invest there. LiDAR has been interesting. We think LiDAR is certainly required for Level 4 and 5. There's no question about it, where you need vision radar and LiDAR in full redundancy 360 to the vehicle. As you get into Level 3, generally speaking, you need LiDAR for the forward-looking component because of localization as well as free space detection and redundancies. So there's some really compelling reasons to have LiDAR on Level 3. For some use cases in Level 3, we think radar can actually move up and take over that role. But today, it's LiDAR. Below that, for Level 2+, LiDAR today doesn't really make sense. It's too expensive, and it doesn't open up any new value prop or use cases for us. So it doesn't really expand what you can do with level 2+. And so until LiDAR comes down dramatically in terms of price point as well as its ability to really open up new use cases and which we'll always continually assess, it's probably not -- doesn't really have a role in Level 2 or Level 2+. Now that said, we have investments in LiDAR with 3 different companies. And the reason we do that is we want access to that technology. We think it is an important sensing modality, and we need to stay current and have access to it. But today, for Level 2 and 2+, it's really not seeing a role there. And then similarly, for thermal, we looked carefully at infrared and not sensing. And it's interesting. It does some things really, really well. In terms of nighttime detection, pedestrians and other things, it's actually pretty -- it's very effective. The issue, though, today has been -- I can get that same performance with a combination of radar vision. And for Level 2 and 2+, it hasn't really opened up significant use cases that are commercially compelling. So when you think about the cost you add, the complexity you add versus what the benefit is, it just hasn't made sense yet from a 2 or 2+. For Level 3 or even 4, we're continuing to look at it. Can it -- and with those systems, you want to have the greatest and the most accurate perception system that you can. Can the IR play a role? Maybe. But that's -- time -- there's a lot more work that has to be done out there. And then finally, for Motional, the JV is -- now it stood up now for earlier this year. They've resumed rides in Vegas. They've announced a partnership with Via, so really great progress to their time lines. At the end of this year, they're targeting taking the driver out of their vehicle and then still in '22, really going with that initial launch of the Gen 2 vehicles. So that partnership with Hyundai and Aptiv in that JV, I think, is really bearing the benefits that we were hoping for, which was bringing together a vehicle system provider with the technology stack and Aptiv's ability to provide tech into it. That's a great combination, and we're seeing that one out. So really excited about what 2021 has instead -- in store for the JV.

That's great. I think we're just about out of time here. This has been incredibly helpful. So Glen, Elena, thank you so much for joining us. And those in the audience, appreciate you taking the time as well. Thank you so much, everybody.

Great to be here. Thank you, Brian.

Thanks, Brian.