Itay Michaeli • TD Cowen

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EVP & CFO Christina Zamarro provided a preliminary 2026 outlook, highlighting a potential couple hundred million dollar tailwind from raw materials and at least a $250 million benefit from Goodyear Forward. She also quantified the high sensitivity of earnings to price and volume improvements. CEO Mark Stewart stated that while the company is aggressively managing its cost structure and flexing plants, it is not contemplating major new restructuring actions beyond those already announced in Europe and South Africa, as the current environment is not seen as reflective of the long-term business.

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CEO Mark Stewart explained that Goodyear is well-positioned with its large U.S. footprint and ongoing factory modernizations, which will add 10 million units of high-value tire capacity. CFO Christina Zamarro added that H2 volume assumptions include a recovery in Asia Pacific, strengthening volume in EMEA, but continued toughness in the U.S. and Latin America due to channel inventory and OE volatility, though OE market share is expected to grow.

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CFO Ricardo Rodriguez reaffirmed that the path to the 2027 revenue target remains unchanged, supported by ACC, Daimler, and GM. He noted that current quoting activity is tilting towards prismatic cells and that OEMs are taking more time with decisions due to policy uncertainty, with more clarity expected in the first half of 2026.

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CEO Brian Krzanich noted that while specific model details for the VW Group win are confidential, XUI deals typically feature a higher PPU and broad deployment across a brand's lineup. He asserted that non-auto growth will be funded through productivity gains from internal AI tools, aiming for 15-20% engineering efficiency improvements, rather than increased OpEx.

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Executive Brian Krzanich suggested that customer interest is primarily driven by technological innovation, such as new multimodal features, rather than tariffs. However, he conceded that OEMs facing price hikes may need to offer more value, creating an opportunity for Cerence. On non-automotive ventures, Krzanich highlighted a partnership-led, cost-effective strategy, citing the Code Factory collaboration for voice-enabled kiosks. He emphasized that the focus is on applying existing tech to new verticals with clear demand, but did not provide a specific timeline for meaningful revenue, noting the strategy prioritizes smart growth over rapid expansion.

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CEO Kevin P. Clark stated that while Aptiv has visibility into production schedules, the company has adopted a conservative outlook for the second half of the year, anticipating a potential pull-forward of demand into Q2. He also confirmed that Aptiv has already benefited from increased content on larger North American trucks, which has helped offset the slowdown in EV adoption.

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CEO Antonio Filosa quantified the impact at approximately half a percentage point of market share in North America. He outlined a new strategy led by a recently hired executive, which involves diversifying the fleet sales mix away from 'Rent-A-Car' and toward the higher-margin 'Commercial' and 'Governmental' sub-channels. He expects a partial recovery to begin soon and accelerate into the next year.

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CEO Chris Urmson stated that each new lane will be easier to launch, as the core driving task is largely solved and the U.S. freeway system is self-similar. He noted that the second-generation hardware kit will provide incrementally longer sensor range but is primarily focused on reducing costs and enabling scaled manufacturing. CFO David Maday added that the ability to produce a larger quantity of Gen 2 kits is a key enabler for expansion.

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CEO Robert Scaringe confirmed the company is very focused on moving from the current "hands-off, eyes-on" system to a "hands-off, eyes-off" (Level 3) capability on highways next year. He stated that Rivian does not envision an R2 without a very robust, standard autonomy platform, noting it will feature an enhanced perception stack with 65 megapixels of cameras, as this capability is a critical part of the customer experience.

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CFO Jason Cardew stated that while they anticipate potential pressure on trim mix, they haven't seen significant changes yet, though some specific options like rear-seat entertainment could be affected. CEO Raymond Scott added that Lear is proactively offering customers alternative solutions to mitigate these costs. Cardew noted that most of the new business awarded in the quarter is expected to launch in 2028.

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President of Ford Blue and Model e, Andrew Frick, responded that they will be opportunistic, taking share if profitable or taking price if not, on a vehicle-by-vehicle basis. CEO James Farley stated that Ford is on track with its Level 3 ADAS development, which will be an internally sourced product aiming to be the 'best,' not the first, and is distinct from the current BlueCruise system.

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CEO Seetarama Kotagiri responded that it is too difficult to separate the active safety shortfall between legacy Magna and Veoneer. He clarified that his comments on win rates were specific to China, which represents 10-12% of the ADAS business. He stated that quoting activity and win rates outside of China remain in line with past trends, although some OEM sourcing decisions are in flux due to shifting vehicle architectures.

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