Aptiv PLC (APTV) Earnings Call Transcript & Summary

Welcome, everyone back. This is going to be one of our probably most attended sessions of the next 2 days. And with us today is Aptiv. I think needs very little introduction. I'd like to say that if you're working on the big 3 automotive megatrends of electric, autonomous and connectivity, whether you're looking for an hour or a year, it's hard not to be impressed with the things occurring over at Aptiv. With us today is Joe Massaro, CFO; and of course, Elena Rosman, Head of IR. Thanks, guys, both for joining. Really appreciate it.

Thanks, Chris.

Really quick background for the generalist on the line. So Aptiv is a Tier 1 megatrend leader. They do roughly $16 billion in revenue this year with a stated growth rate above market production of 6% to 8%, and we've talked in our research that we think this number is moving higher over time. Their 2 divisions are Advanced Safety and User Experience, which houses both active safety and connectivity; and then Signal and Power Solutions or SPS, which houses their Electrical Architecture. And with that, Joe, I know you don't have slide, but maybe to just give a couple of comments, I think, about probably this elephant in the room. I'm sure the question box is already being filled with it, chips. You could talk short term, talk structural, but we would love to hear what Aptiv is seeing in the market.

Sure. Sure. So no, thanks for hosting, Chris. So clearly a relevant topic. Obviously, the industry has been impacted significantly this year with constraints in semiconductor supply. I think it goes beyond automotive, but obviously, we're dealing first and foremost with challenges in automotive. I think it's important -- sometimes it's been a little bit of an overgeneralization around chip constraint or chip prices or -- and making it sound like it is sort of one thing. And at least as it impacts automotive, it's been a couple of distinct things and I think it's important to understand those. We originally started with what I'll call a COVID-related supply-demand imbalance that first came to light late December last year and early January this year. And that -- the genesis there, the risk of oversimplifying a little bit, but not too much. Really we had a disconnect between the automotive industry and the semiconductor industry where I think semi probably was assuming a bit more of a U-shaped recovery in automotive versus the V that the industry was forecasting and communicating to the supply base. And I think that came at a time when there was demand in other end markets, particularly things like sort of what I'll call the work-from-home technology industry, both the consumer side as well as maybe the back end on the telecom side. There was other demands for the chip or more media demands for that chip capacity, all the way back down to the wafers. And as an industry, we started to learn about that very late last year, early this year. I think for a period of time, we were probably being supplied out of inventory from the semiconductor guys. And that constraint was meaningful in a couple of ways. One, it hit quickly. It cost the industry about 1.5 million by some estimates, 1.5 million units of production in Q1. And the real challenge is the lead times for a lot of these chips, right? It's a 3 to -- anywhere from a 3- to 9-month lead time depending on the technology. So yes, when you become aware of a shortage in December, January, and you have to sit down with the suppliers, as we did as an industry, Aptiv, our customers, everyone really know them. And telling if you needed more supply, you're inherently going to wait for a period of time as -- given the lead times of the product. And we've seen that improve to some extent. That original supply-demand constraint cost, as I said, about 1.5 million units in Q1, calling it somewhere between 500,000 to 700,000 units in Q2 and is generally I'd call for the balance of the year hanging around sort of a 500,000-unit impact per quarter for the back half of the year. So it's gotten better, not as impactful as it was in Q1. I do think some of those constraints are going to last into next year, possibly the full year, around certain technologies, the longer lead time items. But again, it's one where we're aware of it. We're working through. Obviously, you've got to deal with the lead times. The industry has also been impacted by 2 separate what I'll call supply shocks on semiconductors. One was the Naka fire. Naka is a Renesas semiconductor fab. Renesas is one of the largest suppliers to the automotive industry semiconductors. Naka is one of their larger automotive facilities. There was a fire there in late March that really created what I'll call an air pocket in supply with inventory was destroyed and the fire equipment was destroyed in the fire. And we saw that air pocket manifest itself in late May and June. Very significant impact to the industry, cost well over 2 million units of production in that May, June time frame. That's gotten better in Q3. I would say there, the Renesas has done a good job of reacting, getting capacity back up in that plant. They're not quite at pre-fire levels of shipments, at least from what we see, but they're close and certainly continues to need constant management but certainly much better than it was in that May, June time period. The most -- the second big shock and the one we're dealing with now, which has been more impactful in the quarter than I think the industry was assuming, including ourselves, is really the COVID-related shutdowns in Southeast Asia. Semiconductor industry produced -- has a lot of their back-end manufacturing processes, test assembly packaging in Southeast Asia, places like Malaysia, where we've seen COVID outbreaks, very firm government shutdowns of facilities. That is causing a pretty significant disruption in Q3. I think if you were talking to folks in the industry in the July time frame, may have estimated 1 million to 1.5 million unit impact as we started to see some early lockdowns. But those lockdowns not only continue. They grew. And it's now estimated to be 3 million to maybe even a little more units lost -- 1 million units lost in production in Q3. So very impactful. A small cell relining with Southeast Asia, unlike the Naka fire when folks -- when the lockdowns are over and folks can go back into the plants. Inventory tends to flow pretty quickly. In some cases, it's finished goods just waiting to be shipped in the plants. But you're not dealing with a situation where WIP was destroyed or manufacturing capacity was impacted. It's really just a result of pulling the labor out of the plant for shutdowns that have been averaging, I would say, close to 2 weeks in most states and places like Malaysia. So very disruptive again, and would expect there to continue to be disruption at some level in the fourth quarter and into next year. But I think it's important to understand that those 2 shocks have been as, and in some cases, more impactful in particular months or quarters than, Chris, the overall -- the original sort of supply-demand imbalance.

Joe, that's really helpful. And I think when -- and we've talked. Those 3 combined, there are 7 million plus. It's a big number. Obviously, the Malaysia maybe being the biggest of the 3. Investors are trying to figure out. So this year ends up being 80 million. That gets you back to the high 80s. What then gets us because clearly demand and the restock will be something more? So how do we think about what your customers are talking about front-end capacity or eventually to get us above that 90 million? What needs to happen on the supply chain?

Yes. I think you've got to -- that's going to take some time. It's hard to call at the moment. Part to your point, we sort of see where we end in 2021. But I think from a supply chain perspective, we really need to get back to ability to service current supply -- or current demand, sorry, right, but just keep -- get enough inventory in place that we can produce what the cars that want to be produced today and then rebuild that supply chain to a point where you can start to build inventory. And even in -- if you think of something, and we often get this question of, well, can you hold more chip inventory? We're not able to, and this isn't an Aptiv issue. It's really an industry-wide issue. And in some cases, there are tier -- other Tier 1s that are even impacted more than we are at this point. It's hard to get enough inventory to meet current demand, let alone to start to build inventory balances within the supply chain. So it's going to take some time. I think it's going to be helped by -- hopefully, we see the last sort of shock to the system, particularly on the chip side, with the COVID in Malaysia and Southeast Asia. But it's going to take a period of time where we don't have those kinds of shocks and things are allowed to stabilize. We start to meet demand and can then start to build inventory up throughout the chain all the way up to ultimately vehicle inventory and where OEs want to have their vehicle inventory. But I do think it's going to take a period of time. I don't think this is something that's fixed on January 1, 2022, or on July 1, 2022. I think it's going to take time and should get better through 2022. But it's going to take time until we're sort of back to, if you want to describe something that's sort of a pre-COVID normal. That's going to take into 2023, I think, in our view.

Okay. That's great. And I'm going to put chips to the side because I know the Q&A will fill up with that. So we'll leave like 5 or 10 minutes at the end. But I really wanted to talk about some of the secular drivers for Aptiv because that's really the theme of the conference. And when I -- I think you gave this framework, 6% to 8% GoM CPV, I want to frame it, but growth above production many years ago. And you've really been doing the high end, if not, above. And these businesses are now scaled. ADAS is 2 billion. EV is 1 billion. I think we've been vocal that it seems like that number is going to move higher. And just wanted to get your take on -- obviously, there's a law of large numbers. But can Aptiv be a company that grows more like 8% to 10%, if ADAS and EV really do continue at the growth rates that we are starting to see over the next couple of years?

No, it's a fair question. We get it a lot. It starts with, to your point, the 6% to 8% was a range we provided in 2019 for a multiple year period. So it's not simply a matter of trying to be conservative. But when we give a range like that, we want to make sure that we're taking into account all the things that happened in the industry, right? There's -- there are programs that go away over time. We exited the display business in that time frame and had all of that math in sort of factored into the 6% to 8%. But you're right. We have been running higher than that or at the top end of the range and certainly running higher than that this year, where we've talked about a 10% growth over market for 2021 despite the production disruptions and the supply chain issues. This year is clearly driven by a lot of high-voltage launches. We're seeing a really active high-voltage market, and that's going to continue to grow. But this year, in particular, it's very heavy launch activity. And we're also benefiting from, I think, as part of the chip saga -- and I think you've heard a lot of people talk about this. There is a bias towards -- when OEs have chips, they're biasing towards the higher contented vehicles. Those are the vehicles they want to sell. So trucks and SUVs in North America, for example. And in the case of Europe, a lot of focus on EVs, right? They're actually prioritizing EVs over some internal combustion platform. So we're getting a positive mix this year that's helping push above that 8%. Certainly, something we'll reevaluate. We look at our long-term growth opportunities. Every couple of years, we went up in 2019 when we took the range from 5% to 7% to 6% to 8%. But again, it's a multiyear number that we like to be able to provide. We think it's a good benchmark for -- to measure Aptiv, but it's also something we take very seriously to make sure we hit those commitments. So we'll certainly look at that going into next year, but at this point feel very good long term about the 6% to 8%. We feel good about the 10% this year.

Okay. Great. Well, maybe if we can -- if we look at some of the drivers of that EV and ADAS, on electrification, I think, Joe, when we last spoke about this a couple of months ago, you were looking at something closer to 65%. I think that works out to about $900 million in high voltage. The industry, clearly, volumes have been a lot better. We're thinking maybe it would be an 80% year-over-year for actual units in EVs. Are you seeing a step up in your business maybe above that 65% rate, meaning just because the units are better?

Yes. I mean we're -- we've talked openly about being somewhere just shy of $1 billion this year in high-voltage revenue. We expect that product -- and now that's a big number, obviously, from a product line perspective. We got there quickly, but we still believe over the next couple of years you'll see that number grow in that 50-plus percent annual growth rate. Bookings have been significant. High-voltage Atlanta can go through in a minute just the level of bookings as well as the level of -- Kevin referenced it on the earnings call in August. The number of bookings opportunities we're seeing have increased incredibly over the last couple of years. But yes, still, Chris, lot of growth opportunities. Like I said, it's a heavy launch cycle this year. It could be -- when you're launching this heavy, it can be a little lumpy on a quarter-to-quarter basis, but long term, feel very good about our position in high-voltage. Elena, do you want to touch on just the bookings and the booking opportunities?

Yes. Sure, Joe. So year-to-date, through the second quarter, we booked $1.4 billion in high voltage. And actually, that included a new quarterly record in the first quarter of $900 million. We communicated in late June at our high-voltage electrification teach-in that our bookings this year would be over $2.5 billion for high voltage. So that's greater than the roughly $2 billion average that we've had over the last 3 years. So yes, I mean, when you look at sort of growth rate and market, Chris, we do see we're growing a little bit faster than the high-voltage market in 2021. We have the high-voltage market growing a little bit over 55%. So we're growing a little bit faster. And I think, more importantly, as you look out over the next couple of years, that market growth kind of comes in a little bit, and we stay still elevated at this 50% type level for the next couple of years. And again, we communicated. It's a business that Joe said just under $1 billion this year with the revenue target to be north of $2.5 billion by 2025.

And, both, Elena and Joe, is there any capacity constraints here? I mean I think you talked about your 1 out of every 2 BEVs being launched, 1 out of every 3 general and electrical architecture. I mean, if the industry is growing faster and you have a pole position, do you have that ability to take bookings on in the $3 billion, $4 billion level? Or would there have to be another round of investment, whether it's personnel or just R&D dollars? If you talk a little bit about that scale.

Sure. Now listen, one of the advantages we have, which is why you've seen us, I think, be able to get to market so quickly and support such a large number of high-volume customer launches is because we're effectively building off of a business that has a large scale, right? Our existing Electrical Architecture, that SPS business, today has content on 1 out of every 3.5 vehicles manufactured globally. So there's a business there with a very robust operating system, robust manufacturing footprint, engineering talent and just strong capabilities, right, that we've been able to leverage. So we'll be able to scale that business. I think within the existing financial framework, this doesn't look to us like something where we're going to require major step-up in capital appropriations or capital equipment or plants. We'll be able to do it within the investment cycle in that business. And partly, it's because it's -- in a lot of cases, it's more of the same equipment. We're able to sweat the assets a little bit more. One of the reasons that high-voltage product line is already at segment margins is because of our ability to leverage existing infrastructure. So we'll certainly make investments there. We've been making investments in that product line for a couple of years now, but I think within -- over -- maybe 1 quarter, it's a little harder. Maybe 1 year it's a little harder. But I think over a reasonable period of time, it will be very much in line with that existing financial framework. So that 5% of CapEx, as a percent of sales, those types of things.

Okay. That's great. I'm going to come back to ADAS, where I think your position as a leader in both camera and radar and Level 2+ systems is pretty well known. And I told you yesterday I wanted to speak a little bit and give you a platform to talk about the developments at Motional. We personally don't think Aptiv gets enough credit for this asset when you look at the mark-to-market that we've seen in other leading AV platforms. And I guess this is a very broad question, but do you think you need to kind of point out the value? Does it make sense to have financial investors that take 5% stakes to sort of have a mark-to-market? Or are you basically content to run this asset and the market will have a monetization point when it's ready?

Yes. Listen, I think the answer is sort of -- to all of that is yes, right? We're obviously -- I think we've demonstrated a pretty good track record of being thoughtful around capital deployment, capital allocation. And I take -- I would view sort of accepting of inbound capital in that same vein. So we're mindful of that. We watch what's going on in the market. We have a partner in Hyundai that I think is equally as thoughtful. But there is an element of -- we hit the marks from a technology perspective in Motional, which they've been doing. We hit our marks from a commercial perspective in the next sort of 12 to 18 months in Motional. And I do think there's a bit of -- that will prove out that value, right? And we worked very hard on that post-acquisition of nuTonomy of developing that business, integrating the software stack with Automatica, developing our relationship with Lyft. And as part of the JV formation, the value creation there was proven out, right? And that wasn't -- we didn't spend sort of 4 years looking for -- 3 years looking for a JV partner. We spent 3 years focused on the technology and the development of that business and good things happen from a valuation perspective. So we'll remain mindful of what's going on and what the options are. But priority for Karl and that team, first and foremost, is to really hit those marks from a technology and more importantly from a commercial perspective.

Okay. So you think the commercial business basically will drive monetization? Meaning there was not going to be a funding issue. You're well funded for the next couple of years from Hyundai. You don't see a need for additional.

No. Listen, it's -- we're not in a position where we need it. Part of the JV structure -- and this is why we wanted to structure transaction that way. Hyundai put -- as I'm sure some folks are aware, Hyundai put $1.6 billion of cash into the joint venture upon formation, March of last year. We talked then about that being worth about 4 years of cash. They continue to be on that path. We didn't want a situation where the funding of the business was dependent upon technology milestones because as far as you try, when you're in that situation, you inevitably start managing the business to the milestones for funding versus taking into account any maybe commercial changes or any required changes. So we didn't want to put the business through that. Hyundai agree completely. But yes, listen, we're -- like I said, we tend to be -- we try to be very thoughtful around taking advantage of opportunities and bringing in people like Hyundai that can help the business get to the next level. So we'll remain on the lookout or aware for situations like that. But first and foremost, it's -- we've got to run that business and they need to hit their milestones and, to some extent, it will -- that's the right path forward and things should take care of themselves from there we think.

Okay. And then I wanted to at least touch on the ADAS TAM. I think people are pretty well aware of your tech position. But -- and we can obviously track your orders, right, where we could be starting to pay $4 billion plus. But maybe do you have a view -- a couple of years ago, you gave sort of the size of the Level 2+ market, which is clearly where you have this high content, almost Level 3 type content, but at a price point where there's real units. Are you seeing a pull forward and acceleration from specifically your major OEM customers to pull forward Level 2 products in more like -- Level 2+ products in the '23, '24 time frame?

Yes. Let me start and then Elena can go through sort of where we see the penetration rates. But I'd say what we're seeing is if -- you recall, we've talked a lot about our satellite architecture wins, which were these systems across 5 OEs that were specifically designed to go in on a launch platform -- on a key platform where the customer really wanted a quality Level 2, Level 2+ system. And then the plan was to take -- once launched to take those systems across multiple platforms within the OE. That's really what it was designed to do. And beneficial from both our perspective as well as the OEs perspective. And that really you were not reinventing or redesigning a system by platform. You are really making that large upfront investment once on an important platform for that OE. And then the porting cost, the cost of taking a system that's been designed for a particular platform and moving into another platform within the OE, a lot less significant, a lot less expensive than designing a system from scratch. So what we're really seeing now, which I think where you're seeing a lot of the growth over market coming from is these active safety systems have such a consumer appeal, right? Customers today expect it. Rebuy rates for our customers are well above 95%. We don't have a car from 2019 that has an active safety system and buy one in 2022 that doesn't or doesn't have the same level of features, if not, more customers are expecting it. I think folks like Tesla and some others, Toyota, Hyundai have really set a standard there of what to expect as sort of a -- even at entry-level type vehicles. So what we're seeing move faster is really pulling that across more and more platforms more quickly. And it tends to be even as some of the lower-end models, the Vs, the Cs, those types of platforms where they're fairly robust Level 2 system. So that's really what we're seeing. Elena, do you want to cover the current take rates real quick?

Yes. Happy to. Yes. So I mean active safety penetration we're really approaching by next year about 60% of all vehicles will have some form of active safety on them. And when you break that down, the biggest portion, I'd say, would be about 40% of vehicles next year will have either a Level 0, Level 1 type system and about 20% of vehicles given that increase that Joe referenced will be Level 2, Level 2+. We see that accelerating through 2025. So somewhere in the range of 70%, 75% of vehicles that are manufactured by 2025 will have, again, some form of active safety, the largest still being Level 0, Level 1, but where you see the fastest growth and certainly where Aptiv has won significant shares in this Level 2, Level 2+ market. So 25% of vehicles produced by 2025 should have a Level 2, Level 2+ system. And that increase in Level 2, 2+, I mean, certainly, you're seeing more customer pull, consumer pull in addition to increasing regulatory push for additional ADAS features, certainly at Europe NCAP requiring automatic emergency braking, driver state monitoring on new vehicles over that time frame. And then in the U.S., you have a commitment by most automakers in the U.S. to also have those features standard during that time frame.

And Elena, that regulation point leads me into some of the questions that are coming in. Elena or Joe, do you think some of the push that we're seeing, some of the NITSA investigations into things like Level 2, Level 2+, will there be a higher content per vehicle opportunity, whether that's driver monitoring, whether that's increased centers, whether it's redundancy and maybe LiDAR, which has not been part of Level 2+? Just talk about the interplay of maybe regulations in Level 2+?

Yes. Listen, today, we've actually seen the North American market, to some extent, run ahead of -- the market itself run ahead of regulations, right? There was sort of a nonbinding agreement to include more content -- actually content vehicles leading into 2022. Folks like Toyota and Hyundai have set some standards that are forcing a competitive dynamic where given into similar expectations, OEs really need to have the content. So I think you'll see that continue. There's no doubt that the benefits of active safety systems have been recognized by regulators in really all 3 regions that we work, and I would include China within that. And I think you're right. There'll be both a push, pull. I think you'll have some push from governments on things like driver state monitoring, particularly as the technology gets more robust and you get things like Level 2+ systems or highway pilot Level 3. They'll require some driver state monitoring or cabin sensing. And you're also going to continue to see a lot of pull, I think, from the consumer side where, again, it's -- there's an expectation now that these cars do certain things, that the cars protect people in certain ways. It's a trend we've expected for a long time. I think there's certainly a consensus that I think the passive safety side of things has probably gone as far or almost as far as it possibly could, right? And really, the next way to make cars more safe were through these active safety technologies. And I think the other tailwind for active safety, and it's interesting how all of these things are coming together. There's a consumer expectation that battery electric vehicles are very rich in technology, right? And that's partly driven by the fact that the OEs and a lot -- and they're very public about this. They're chasing Tesla, right? Tesla has set the standards for battery electric vehicles, where you expect them to have, not only the electric powertrain, but you expect them to have a very robust digital experience within the cockpit and you expect them to have very robust active safety features. And we've seen -- in a lot of cases, we've seen a go-ahead or a move of these satellite architecture platforms and actually a system that we've been working on for a number of years for one of the large German OEs where they've picked it up and moved it to their battery electric platforms because they were such an urgency to get the BEVs out. We've seen a lot of porting of existing active safety systems onto the BEV platforms, which, again, is a win-win from both our perspective as well as the customers because there's just a lot less expensive to develop new systems. And you can take something that was build for a very high-end German luxury vehicle and move into a high-end performance BEV that, that same OE is working on, has been great for us. And again, it's a good value for the customer.

Okay. Joe, I do want to go back to the Q&A, and I think we're going to get 2 chip questions, but they are one secular, ones were numbers based. On the secular side, you actually, I think, addressed this in conversations we've had. But EV and ADAS, those chips -- there's a higher chip content. Is that one of the reasons that we're seeing the production shutdowns or is it other chips? Meaning if that keeps on growing, are we going to have more production issues as a result of EV and ADAS growing so quickly?

Yes. I think, listen, there are some differences among chips, where chips are manufactured. I would tell you, for instance, the Southeast Asia situation tends to be hitting more some of those legacy controller -- legacy ASICs that go into brake controllers, vehicle controllers. Engine controller is a little harder at the moment. Listen, there's definitely constraints around things like images and video serializer chips, right, which cars need a lot of radars and cameras. That was something where that original supply-demand imbalance came from. That was in part -- again, there were some assumptions made by folks around U versus V-shape recovery in auto. And if you think of those technologies of video serializer maybe heads all the way back to the wafer itself, right? Chips are maybe not the same, but the wafer -- the manufacturing capacity for the original wafers, that's also where the work from home type technologies were pulling, right? There's a lot more folks with cameras in their homes today than they were 2 or 3 years ago, right? So that was some of the supply-demand imbalance. I expect that's some of the areas where we expect that to be tight going into 2022. But there's certainly capacity coming on. I think as you get into 2023, 2024, there has been conversations for years now about the growth in video, the growth in radar within automotive. The chip suppliers are well aware of that. There were capacity plans and those out years to deal with that. Now we've got to make sure that they follow through with those. But I would say it's certainly an area that's tight. There's been a lot of communication around expectations from a demand perspective. The one other area where you pick up a little bit of benefit -- and I think this is going to be -- this is sort of a structural element here, too. Some of the newer technology applications are on newer chips. So there's, broadly speaking, been more investment recently in these chip industry all the way down to wafer fab for these technologies, right? Some of the real pinch points could be on these legacy chips that have been in automotive for 10-plus years. They tend to be manufactured by 1 chip company. They tend to be manufactured in 1 chip plant and 1 chip company. And if that plant happens to be in Southeast Asia at the moment, there's not a lot you can do to go get alternative supply because it can only be made there. So we pick up some benefit of that from the newer technologies. And I actually -- one of the things Glen De Vos, our CTO, and his team are working on is to really make sure as we think through products that are launched in 2025 like SBA. That they're really taking advantage of current chip technology. They're in the mainstream of where wafer investment, fab capacity is going. And we sort of get out of the dependency maybe on some of these older automotive chips, which, for all the reasons around, cost pressure and the way automotive leverages volume, really over the past decade or more, we, as an industry, have narrowed ourselves down to a very efficient supply chain, but somewhat constrained in terms of flexibility of where those chips can come from. Got great price points, but over the years have constrained the flexibility of that supply chain.

And Joe, I know that we have a 1 minute or 2, but I mean a lot of the questions boil down to, do you think that tightness that basically needing to build in a buffer, do you think that's one of the things that's happening in sort of the new IHS numbers for '22? Is that basically for the stuff that we don't know, even though we'll get 7 million or 8 million chips back next year, we have to build in a buffer for if something goes wrong because the supply chain is going to still be the same going to next year?

Yes. I haven't talked to them yet, Chris. I don't know what -- to be honest, I don't mean this negative in any way. What level of thought went into that? Were they -- did they have access to that type of information? We don't at this point. I think partly what we're experiencing too is this model mix benefit, right, where there is definitely a concentration going of, okay, we may build fewer vehicles, but we'd rather build 1 vehicle with 4 cameras instead of 2 vehicles with 2 cameras. We're going to put the higher content in. And I don't know how all of that works through their vehicle production numbers. It's a very volatile environment. I'm not being critical of them. They ultimately could be right. We have not seen that level of detail from our customers yet. And it's just too early at this point. And again, just given the visibility and -- from our perspective, the takeaway is really a lot of near-term disruption in production. But I think the end market remains strong. Our OEs want to build the cars when they can. We're seeing, to the extent the production comes out and a current schedule, they're talking about trying to figure out how to manufacture it later when the chips become available. And as Kevin has talked about even on the last earnings call, the tailwinds behind things like high-voltage and active safety remains strong even in this disruptive environment.

Well, that's great. I know we can go on for hours. So I really appreciate it guys for coming on. And Joe, it's always nice. We always have a straight, frank conversation. Lots of interesting headwinds and cross wins in the near term. But as we said, I'm looking forward to getting those updated content per vehicle numbers maybe next year at the Analyst Day, Elena. So we look forward to that. Guys, thank you so much. And the next sessions we have, NVIDIA and BorgWarner. Thanks so much, guys, and we'll speak again soon.

Great. Thanks for hosting, Chris. Thanks.