Tom Narayan

Tom Narayan questioned why Autoliv's 2026 outperformance guidance is 1% compared to the 3% outperformance achieved in Q4 2025. He also asked for more details on Autoliv's performance with Chinese OEMs, including exports and prospective production in Europe.

Answer

President and CEO Mikael Bratt and Managing Director Agnieszka Vilela (acting as a company spokesperson) explained that the 1% outperformance aligns with the lower end of the 1-2% CPV contributor, with LVP being negative and a neutral mix effect expected for 2026. They highlighted strong growth with Chinese OEMs, doubling their position in recent years, and confirmed winning an important quote with a Chinese customer for European production, where Autoliv is the sole external supplier.

Tom Narayan from RBC Capital Markets sought clarification on Autoliv's 2026 guidance for market outperformance, questioning why it's projected at 1% compared to the 3% achieved in Q4 2025. He also inquired about Autoliv's performance with Chinese OEM exports to Europe and their prospective production plans in the region.

Answer

President and CEO Mikael Bratt explained that the 1% outperformance aligns with the 1-2% content per vehicle (CPV) contribution, considering negative light vehicle production (LVP) and an expected neutral regional mix effect for 2026. Regarding Chinese OEMs, Mikael Bratt noted strong growth and market leadership in China, confirming a significant win with a Chinese customer for European production, positioning Autoliv well for future localization efforts.

Tom Narayan requested a breakdown of the three Q4 headwinds (less inflation compensation, higher depreciation, lower engineering income) by order of magnitude, and asked about the impact of BYD's declining market share in China on Autoliv.

Answer

Fredrik Westin, EVP Finance and CFO, ranked the Q4 headwinds: engineering income (largest), less out-of-period inflation compensation (second largest), and depreciation expense increase (third largest). He also noted that BYD's flattening market share in China is mathematically supportive for Autoliv's outperformance relative to Chinese OEMs' LVP.

Tom Narayan from RBC Capital Markets inquired about the progression of Autoliv's performance with domestic Chinese OEMs, asking if the outperformance seen in June would continue, and questioned the reasons for large swings in specific product volumes, such as knee airbags.

Answer

CEO Mikael Bratt confirmed that the company is on track to close its performance gap in China and expects to outperform the market by year-end. CFO Fredrik Westin explained that the product volume volatility is a result of mix effects within product categories, where varying sales prices can create apparent disconnects from overall sales trends.

Tom Narayan asked about the biggest drivers behind the projected $100 million increase in 2026 adjusted operating expenses, specifically inquiring about the impact of Mentee R&D and FX. He then followed up on the potential for Mobileye to monetize Mentee Robotics in the future, similar to Hyundai's relationship with Boston Dynamics.

Answer

Moran Shemesh, CFO, identified the primary drivers for the OpEx increase as approximately 5% for regular salary and benefits inflation, plus the consolidation of Mentee R&D expenses. She noted that FX headwinds are mostly offset by Q4 workforce efficiency initiatives. Amnon Shashua, CEO and Founder, added that Mobileye's growth into a Tier 1 position and heavy investment in future advanced products also contribute a few percentage points to OpEx growth. Regarding Mentee monetization, Mr. Shashua believes the market is still internalizing the acquisition news but expects it to create a 'dividend' similar to Hyundai and Boston Dynamics in the near future, given Mentee's mature technology and potential for rapid progress with Mobileye.

Tom Narayan asked about the primary drivers behind the $100 million increase in 2026 adjusted operating expenses, specifically the contribution from Mentee R&D and FX headwinds, and then inquired about the potential for monetizing Mentee Robotics in the future, similar to Hyundai's relationship with Boston Dynamics.

Answer

Moran Shemesh (CFO, Mobileye) and Amnon Shashua (CEO and Founder, Mobileye) explained that the increase is mainly due to 5% normal salary and benefits inflation, additional infrastructure for advanced products, and Mentee R&D expenses. The FX headwind is largely offset by Q4 workforce efficiency initiatives. Amnon believes the market is still internalizing the Mentee acquisition but expects it to create a dividend similar to Hyundai/Boston Dynamics in the near future, given Mentee's mature technology and Mobileye's acceleration, though the exact timing is uncertain.

Tom Narayan requested a review of the Q3 to Q4 bridge, specifically regarding deliveries, product mix, R&D, and SG&A. He also asked if the Elettrica, as a new form factor, would incur a similar initial margin headwind as the Purosangue.

Answer

CFO Antonio Piccon outlined that Q4 would see lower year-over-year deliveries due to model changeover, a positive but sequentially lighter product mix (Daytona phase-out, first F80 units), higher SG&A, a seasonal R&D step-up, and increased D&A from new model production. He indicated that details on the Elettrica's margin headwind would be provided once the car's full design is revealed, similar to the Purosangue's disclosure.

Tom Narayan requested a detailed bridge from Q3 to Q4, covering deliveries, mix, R&D, and SG&A, and asked if the Elettrica model is expected to face similar initial margin headwinds as the Purosangue.

Answer

Antonio Piccon (CFO) outlined the Q4 outlook: lower year-over-year deliveries due to model changeovers, a positive but sequentially lighter product mix, higher SG&A, and a seasonal step-up in R&D and D&A for new models. He deferred specific Elettrica margin impact details until more information is revealed, consistent with past practices for new models.

Tom Narayan asked about the percentage of owners who view their Ferrari as an investment asset, sought details on the 'supply chain challenges' mentioned in the 2025 guidance, and inquired about the current operational status of the new e-building.

Answer

CEO Benedetto Vigna stated the e-building is now fully operational, producing Purosangue and hybrid cars, with lines for batteries, engines, and axles running. He explained that 'supply chain challenges' refer to issues at some suppliers affected by lower demand from large OEMs, which Ferrari is managing via second-sourcing. CFO Antonio Piccon added that while it's hard to quantify 'investor-owners,' collectors likely have this view, but range car buyers should expect normal depreciation.

Tom Narayan sought clarification on the Q2 Daytona shipment number, asked for more detail on the commentary about US residual values, and questioned how the neutral H2 mix outlook aligns with the full-year guidance.

Answer

CFO Antonio Picca Piccon clarified that Daytona shipments were 60 units in Q2, with approximately 40 expected for Q3. CEO Benedetto Vigna reiterated that while some US models face 'a little bit' of residual value pressure, the company has implemented commercial actions like extended battery warranties and does not view it as a major concern. The CFO did not provide more granular detail on the guidance reconciliation.

Tom Narayan asked about the feasibility of the 2030 target for 40% EV models given the timeline and requested data on Purosangue's residual values and customer demographics.

Answer

CEO Benedetto Vigna clarified the 40-40-20 target refers to the product portfolio offering, not sales volume, to preserve client choice. On the Purosangue, he noted new clients are around 10%, it is often driven by female partners, and its residual value is very strong, with some pre-owned models trading above the original sticker price.

Asked about the proportion of investor-owners, details on guided supply chain challenges, and the current operational status and activities within the new e-building.

Answer

It's difficult to quantify investor-owners, but most are enthusiasts. Supply chain challenges stem from weakness at suppliers tied to mass-market OEMs, which Ferrari is managing via direct support and dual-sourcing. The e-building is now actively producing Purosangue and hybrid cars, with components like batteries and electric axles being handled on its upper floor.

Tom Narayan with RBC Capital Markets inquired about the impact of the MSRP exemption/extension on U.S. OEMs, specifically if Dana's higher exposure to these manufacturers means greater benefits from tariff policy changes compared to European or Asian counterparts. He also asked for an update on the deteriorating commercial vehicle market, its typical cycle, and any signs of recovery.

Answer

Bruce McDonald (Chairman and CEO, Dana Incorporated) confirmed that U.S. OEMs benefit more due to vehicles assembled in the U.S., noting that the diminished risk of passing higher prices to consumers is the most important aspect. Regarding commercial vehicles, McDonald stated they see no light at the end of the tunnel, expecting a soft market into mid-2026, though not much further deterioration from current historically depressed levels.

Tom Narayan inquired about the impact of recent tariff policy changes, specifically how U.S. OEMs, to whom Dana has greater exposure, might benefit more than European or Asian counterparts. He also asked for an update on the deteriorating commercial vehicle market in North America and Brazil, seeking signs of recovery.

Answer

Chairman and CEO Bruce McDonald confirmed that U.S. OEMs benefit more from the rebate based on U.S.-assembled vehicles, noting that the diminished risk of passing higher prices to consumers is a key positive. Regarding the commercial vehicle market, Mr. McDonald stated no light at the end of the tunnel, with North America running at a historically depressed 200,000-unit annualized rate and no signs of pre-buy for 2026 emissions legislation changes, though he doesn't expect further significant deterioration.

Tom Narayan of RBC Capital Markets asked if the downward revision to the Off-Highway segment's guidance could risk the timing of the deal closing with Allison and sought a breakdown of the Q2 cost savings.

Answer

Senior VP & CFO Timothy Kraus and Chairman & CEO Bruce McDonald affirmed the deal's timing is not at risk, noting the Off-Highway team has successfully maintained margins despite lower revenue. Kraus clarified that the Q2 cost savings not attributed to the LV and CV segments were primarily from corporate overhead, including engineering, which is then reallocated to the business units.

Tom Narayan sought clarification on the net tariff impact for 2025 and 2026, specifically if the 2026 net tariff impact is also expected to be $1 billion. He also asked how to think about future EV losses, considering a pivot from EV to ICE, potential volume reductions, and plant flexibility.

Answer

CFO Sherry House clarified that the $1 billion benefit from the recent proclamation, allowing greater MSRP tariff offset to parts, will be recorded as a receivable in Q4 2025, offsetting Q4 tariff costs and resulting in a net $1 billion tariff impact for the full year 2025. She confirmed that the full-year impact for 2026 is expected to be similar. President and CEO Jim Farley stated that Ford would provide an update on EV losses and related strategies after the fourth quarter earnings call.

Tom Narayan sought clarification on the net tariff impact for 2025 ($1 billion) and whether the 2026 impact would be similar, and asked how to think about EV losses going forward into next year if volumes decline, considering plant flexibility.

Answer

Sherry House, CFO, clarified that a $1 billion benefit from a recent proclamation, allowing greater MSRP tariff offset to parts, would be recorded as a receivable in Q4, offsetting Q4 tariff costs and resulting in a $1 billion net impact for the full year 2025, with a similar impact expected for 2026. Jim Farley, President and CEO, stated that an update on EV losses and plant flexibility for next year would be provided after the fourth quarter earnings.

Tom Narayan asked about the potential impact on Ford Model e's EBIT if the loss of a consumer tax credit leads to lower EV sales, questioning if it could be a net positive. He also inquired about how Ford is managing headwinds in the European commercial vehicle market.

Answer

CFO Sherry House suggested that a pullback in U.S. EV production could lead to a financial uplift, as capacity would likely be reallocated to more profitable ICE products or European EVs with better margins. CEO James Farley attributed Ford Pro's strength in Europe to its new product lineup (Transit, Ranger) and significant cost advantages from its manufacturing footprint and its production partnership with Volkswagen.

Tom Narayan from RBC Capital Markets asked for an update on the plant due diligence for the Dallee acquisition and whether there is still potential upside to synergy targets. He also inquired about the specific source of the Q2 tariff costs and if AAM is seeing reshoring inquiries from OEMs.

Answer

Chairman & CEO David Dauch confirmed that with shareholder approvals complete, AAM is gaining more access to Dallee's plants and information, and he remains hopeful for incremental upside on the operations side of synergies. EVP & CFO Christopher May specified that the $10 million in Q2 tariff costs came primarily from 'rest of world' scenarios. Dauch added that AAM is receiving inquiries from global OEMs, particularly Europeans and Asians, about localizing component production in the U.S.

Tom Narayan from RBC Capital Markets asked for an update on the plant-level due diligence for the Dallee acquisition, potential synergy upside, the source of the Q2 tariff impact, and whether OEMs are discussing reshoring.

Answer

CEO David Dauch confirmed that with shareholder approval, AAM is gaining more access to Dallee's plants and still sees potential for manufacturing synergy upside. CFO Christopher May identified the $10 million Q2 tariff impact as primarily from 'rest of world' sources. Dauch also noted that AAM is receiving inquiries from global OEMs about localizing production in the U.S.

Tom Narayan followed up on the Q4 outlook, asking if the factors causing the sequential decline were newly emerged since the last guidance. He also asked how the 2018-2019 tariffs affected AAM based on OEM exposure and how potential future tariffs might influence its customer acquisition strategy.

Answer

CFO Chris May acknowledged that some production schedule 'choppiness' and OEM inventory management in Q4 were not fully anticipated 90 days prior. CEO David Dauch reiterated that AAM's 'buy and build local' strategy minimizes tariff impacts across its global customer base, allowing the company to pursue profitable business with strong partners rather than favoring OEMs based on geography. CFO Chris May added that recent wins in China are for the local market, avoiding export tariff issues.

Tom Narayan of RBC Capital Markets asked about the potential net impact on Magna if tariff deals favored North American OEMs over European and Asian ones. He also questioned the confidence level in second-half commercial recoveries and whether macro uncertainty remains a hindrance to portfolio decisions.

Answer

CEO Seetarama Swamy Kotagiri explained that while shifts could impact European sales, Magna's broad footprint positions it well to handle rebalancing and benefit from increased localization in the U.S. He expressed high confidence in commercial recoveries, which are based on historical cadence and ongoing discussions. CFO Patrick McCann added these are specific, program-related items, not just placeholders. Swamy concluded that macroeconomic uncertainty still prevails, adding complexity to portfolio decisions.

Tom Narayan from RBC Capital Markets asked if bookings with Chinese domestic OEMs were primarily driven by their export strategies and inquired about the current trend of ADAS insourcing versus outsourcing by OEMs.

Answer

CEO Kevin P. Clark clarified that wins with Chinese OEMs are broad-based, covering both domestic and export programs. He also noted a reversal of the ADAS insourcing trend, stating that cost pressures are pushing OEMs away from expensive internal development and towards flexible, open-architected full-system solutions like those Aptiv provides.

Tom Narayan asked for the revised full-year growth over market expectation, the impact of the Mexican peso's depreciation on margins, and whether a stronger EV mix in a weaker European market would be a net positive for Aptiv.

Answer

CFO Joe Massaro confirmed the outlook implies 2% revenue growth in a market down 4% and noted that FX impact, including the peso, was not material in the quarter. CEO Kevin P. Clark agreed that a higher EV mix in Europe is a net content opportunity, but emphasized that the actual benefit depends on specific customer and platform mix.

Tom Narayan from RBC Capital Markets asked about the future of GM's Korean operations if current tariffs persist and inquired about the company's strategic outlook for the Chinese and European markets.

Answer

Chairman & CEO Mary Barra explained that GM's Korean operation is highly efficient and its vehicles are in high demand, but a long-term decision awaits certainty on U.S.-Korea trade policy. For China, she sees a path for a smaller but strong, profitable business focused on Cadillac and Buick. For Europe, she noted the market needs to stabilize but sees opportunity for GM's EVs, while also highlighting growth potential in South America and the Middle East.

Tom Narayan of RBC Capital Markets asked if North American price/mix would turn negative in Q4 due to higher EV volumes and pricing headwinds. He also questioned GM's long-term commitment to China amid persistent market challenges.

Answer

EVP and CFO Paul Jacobson confirmed that the price/mix benefit would be lower in Q4 compared to Q3, partly due to timing. Chair and CEO Mary Barra affirmed GM's commitment to China, stating the focus is on restructuring the JV for profitability, leveraging franchise strengths like the GL8, and pursuing capital-light import opportunities.

Tom Narayan asked for a quantification of the cost improvement in the Q3-to-Q4 gross profit bridge and questioned the R2's competitiveness at a $45,000 price point against lower-priced EVs.

Answer

CFO Claire McDonough did not quantify the bridge but reiterated drivers like higher ASPs, lower depreciation, and reduced LCNRV charges. CEO RJ Scaringe defended the R2's positioning, clarifying the $45,000 starting price variant will still have over 300 miles of range and will be competitive through its unique form factor, brand, and performance attributes in a market segment with few compelling options.

Tom Narayan from RBC Capital Markets expressed concern about U.S. dealer inventory levels, asking for Mercedes-Benz's current position and whether there's a risk of significant price reductions. He also asked for an update on the company's thinking and timeline regarding the potential monetization of its Daimler Truck stake.

Answer

CFO Harald Wilhelm stated that U.S. dealer inventory is watched very carefully. He acknowledged a recent short-term spike due to a service supplier issue in July but indicated it should resolve and does not justify commercial action. He reiterated a positive sales outlook for the U.S. in H2. Regarding the Daimler Truck stake, Wilhelm noted there are another six months on the soft lockup, giving them time to reflect. He confirmed no decision has been made on whether to sell the stake or how, stating they are not in a hurry.