Good morning! My name is Brittany, and I will be your conference facilitator. At this time, I would like to welcome everyone to the BorgWarner 2024 first quarter results conference call. All lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, press star two. If you are using a speakerphone, please pick up your handset before asking your question. I would now like to turn the call over to Patrick Nolan, Vice President of Investor Relations. Mr. Nolan, you may begin your conference. Thank you, Brittany. Good morning, everyone, and thank you for joining us today. We issued our earnings release earlier this morning. It's posted on our website, BorgWarner.com, both on our homepage and on our investor relations homepage. With regard to our investor relations calendar, we'll be attending multiple conferences between now and our next earnings release. Please see the event section of our investor relations homepage for a full list. Before we begin, I need to inform you that during this call, we may make forward-looking statements which involve risks and uncertainties as detailed in our 10-K. Our actual results may differ significantly from the matters discussed today. During today's presentation, we'll highlight certain non-GAAP measures in order to provide a clearer picture of how the core business performed and for comparison purposes with prior periods. When you hear us say, "On a comparable basis," that means excluding the impact of FX, net M&A, and other non-comparable items. When you hear us say, "Adjusted," that means excluding non-comparable items. When you hear us say, "Organic," that means excluding the impact of FX and net M&A. We will also refer to our incremental margin performance. Our incremental margin is defined as the organic change in our adjusted operating income, divided by the organic change in our sales. Our all-in incremental includes our planned investment in ER&D, any impact in net inflationary impacts, and other cost items. Lastly, we refer to our growth compared to our market. When you hear us say, "Market," that means the change in light and commercial vehicle production weighted for our geographic exposure. Please note that we posted today's earnings call presentation to the IR page of our website. We encourage you to follow along with these slides during our discussion. With that, I'm happy to turn the call over to Fred. Thank you, Pat, and good day, everyone. I'm very pleased to share our results for the first quarter of 2024 and provide an overall company update starting on Slide five. With approximately $3.6 billion in sales, we delivered close to 7% organic growth in the quarter, despite a modest industry decline. We delivered strong incremental performance in the quarter on an all-in basis, which allowed us to achieve a 9.4% margin. This Q1 performance provides a nice start to the year, and we believe it positions us well to deliver on our full year guidance. Additionally, we continued to take steps in the quarter to create long-term value for our shareholders. We secured multiple new eProduct awards. These awards once again demonstrate our focus on taking leading-edge technology, working closely with our customers to help support them as they transition towards electrification. As I will discuss, we continued to expand our product offerings for electrified vehicles. We focused on the efficient deployment of our capital by repurchasing $100 million of stock during the first quarter. As Craig will highlight, we received an increased share repurchase authorization of $500 million from our board of directors. Now, let's look at some new eProduct awards on Slide six. First, BorgWarner has secured additional eMotor award with XPeng. These awards include BorgWarner's 800-volt eMotor systems, comprised of stator and rotor components, which are customized for use on two upcoming SUV models. Start of production is planned for 2025. BorgWarner's HVH 220 eMotor offers high torque density, enhanced efficiency, and superior durability. We are thrilled to extend our eMotor business with XPeng and build upon our strong partnership with them. Next, I would like to highlight a new product line for electrified vehicles, which is our Electric Torque Vectoring Disconnect or eTVD. BorgWarner secured new business awards with Polestar and an additional major European OEM to supply eTVD for their battery electric vehicles. eTVD is currently in production for the Polestar 3 SUV, and production for the major European OEM is expected to begin later in 2024. The eTVD offers a three-in-one system, replacing the differential and featuring both torque vectoring and an on-demand disconnect functionality for BEVs and hybrids. eTVD is part of BorgWarner's Electric Torque Management System portfolio, which helps improve electrified vehicles' traction and stability. The added weight in hybrids and battery electric vehicles often results in reduced agility and safety performance. BorgWarner systems helps overcome this by enabling a lighter feel and increasing traction, which improves safety. The eTVD is a great example of applying our foundational expertise and capabilities to develop an innovative solution to address our customers' needs as they transition towards electrification. Now, I want to take a few moments to remind you of the strength of our foundational portfolio on Slide seven. First, it's important to highlight BorgWarner's estimated average content opportunity per combustion vehicle, which is approximately $550 on a global basis. You'll note that this content opportunity varies by region. I would point out that our content opportunity in North America is the highest of the three major regions we operate in. So to the extent that combustion vehicles have a longer tail in North America, that could provide a positive sales, margin, and cash flow tailwind for BorgWarner. We also continue to see potential opportunities for growth across our Foundational Portfolio, which had a 2023 revenue of about $12 billion. I would like to list just a few. In turbo, we continue to see North America opportunities as penetration in the region is about 44%, compared to 92% penetration in Europe and 69% penetration in China. If EV growth slows in North America, the remaining combustion vehicles may need to improve efficiency, and turbocharging is one of the biggest enablers to make this happen. For our EGR business, we see penetration opportunities on hybrid architectures. The efficiency benefit of EGR and cooling on hybrids is higher than traditional combustion-only vehicles, as the internal combustion engine operates in a steadier state. Our timing system business also sees penetration opportunities in plug-in hybrids and range-extending EVs, as engine timing chain is the preferred technology in those hybrids due to its superior durability and strength. And finally, we see our all-wheel drive business benefiting from penetration growth on combustion vehicles in Southeast Asia and from a longer tail for North American vehicles. Maximizing the value of our foundational products means capitalizing on these potential growth opportunities, while at the same time maintaining the strong margin and cash profiles of these businesses. Now, let's turn to Slide eight and take a step back. Let's discuss how we believe our foundational and eProduct portfolios are positioned for growth under various combustion, hybrid, or BEV growth scenarios. Starting with our combustion or foundational portfolio, which are on the top left of the slide, BorgWarner has decades of experience in product leadership in these fields. We have a number-one or number-two market share for these products and can support our customers around the globe. This is critically important as customers potentially consolidate their supply base and look to industry leaders that have the financial strength and long-term technology leadership to support them. Let's jump to the right side of this page, where you see the breadth of our eProduct portfolio. This portfolio has grown organically and through M&A over the past several years. We have systematically built a technology-focused portfolio that supports our customers' needs in EVs from grid to wheel. This has allowed us to establish product leadership in multiple areas of our portfolio, including inverters, eMotors, high-voltage coolant heaters, and batteries. We expect that our technological differentiation, scale, and share leadership will continue to enable us to secure new business. Quite simply, our Foundational and eProduct portfolio supports hybrid propulsion, since a hybrid vehicle needs both a downsized combustion engine as well as an electric powertrain. We can utilize the expertise of both our portfolios to support our customers, which we are already doing successfully in Europe and in China. Importantly, when we sell products for hybrid applications, we're able to utilize the same engineering resources, modular design, manufacturing footprint, and sometimes even actual product lines that are utilized for BEVs and combustion vehicles. We believe BorgWarner is well positioned to be successful under various electrification adoption scenarios, including regional specificities. Our product has been purposefully built for this type of an environment. We're focused on achieving above-market growth, regardless of varying levels of electrified propulsion adoption. Our focus is to convert growth into income at the mid- to high-teens level on an all-in basis. To summarize, the takeaways from today are this, BorgWarner's first quarter results were strong. Our sales growth once again outperformed the industry, and we delivered strong conversion on an all-in basis. We secured multiple new eProduct awards in the quarter, which further demonstrate our product leadership position. We're focused on efficient powertrains, and we believe that we have a resilient portfolio of products that allows us to convert mid to high teens wherever the incremental revenue comes from. And we continue to return capital to our shareholders through our first quarter share repurchases and increased authorization from our board. As we look forward, we expect to continue to manage our business holistically. We plan to take the necessary steps to manage our costs while continuing to preserve our long-term profitable growth. While we cannot control the near-term volatility in propulsion mix across the globe, we can focus on what BorgWarner does best, driving sales growth above market production through technology-focused product leadership, converting that growth into earnings on an all-in basis, and following a balanced capital allocation strategy that creates long-term value for our shareholders. With that, I will turn the call over to Craig. Thank you, Fred, and good morning, everyone. Before I dive into the financials, I'd like to provide a quick overview of our first quarter results. First, we reported close to 7% organic sales growth, despite a modest decline in industry volume. Second, we had strong margin performance, which was driven by solid conversion on higher revenue, as well as appropriately managing our costs. This led to a year-over-year incremental conversion of over 23% on an all-in basis. Now, let's turn to Slide nine for a look at our year-over-year sales walk for Q1. Last year's Q1 sales from continuing operations was just under $3.4 billion. You can see that the strengthening U.S. dollar drove a year-over-year decrease in sales of almost 1% or $32 million. Then you can see the increase in organic sales, which was up roughly 7% year-over-year, driven by growth in China and in Europe. Finally, the acquisitions of Eldor and SSE added $11 million to sales year-over-year. The sum of all this was just under $3.6 billion of sales in Q1. Turning to Slide 10, you can see our earnings and cash flow performance for the quarter. Our first quarter adjusted operating income was $339 million, equating to a 9.4% margin. That compares to adjusted operating income from continuing operations of $305 million or a 9% margin from a year ago. On a comparable basis, excluding the impact of foreign exchange and M&A, adjusted operating income increased $54 million on $233 million of higher sales. That translates to an all-in incremental margin of roughly 23%, driven by our higher year-over-year sales and strong cost controls. The net impact of M&A was a $12 million drag on operating income year-over-year. Our adjusted EPS from continuing operations was up $0.22 compared to a year ago, as a result of higher adjusted operating income, a decline in our effective tax rate, and the impact of our recent share repurchases on our share count. And finally, free cash flow from continuing operations was a usage of $308 million during the first quarter, which was a higher usage than a year ago, as our working capital performance was impacted by the timing of customer collections due to the Easter holiday, as well as the timing of tax payments. Now, let's take a look at our full-year outlook on Slide 11. Starting with foreign currencies, our guidance now assumes an expected full-year sales headwind from weaker foreign currencies of $100 million compared to 2023. This also is a sales headwind of $100 million versus our prior guidance, with the Chinese renminbi and Korean won being the largest drivers of the change in our outlook. Next, we expect organic growth of approximately 2%-5% year-over-year compared to our prior guidance of 1%-5%. This increase is predominantly driven by strong sales growth in the first quarter. Within this guidance, our full-year end market assumptions of flat to down 2.5% is unchanged. Additionally, we continue to expect to deliver between $2.5 billion-$2.8 billion in eProduct sales, which is up significantly from approximately $2 billion in 2023. Finally, the Eldor and SSE acquisitions are expected to add approximately $30 million to 2024 sales. Based on these expectations, we're projecting total 2024 sales in the range of $14.4 billion-$14.9 billion, which is in line with our prior guidance, despite the additional FX headwinds. Now, let's switch to margin. We continue to expect our full-year adjusted operating margin to be in the range of 9.2%-9.6%. Excluding the impact of Eldor-related losses in 2024, our outlook contemplates the business delivering full-year incrementals in the mid to high teens on an all-in basis. We believe this margin performance reflects the underlying earnings power of our company and our focus on delivering strong conversion on higher sales, while also appropriately managing costs. Based on this sales and margin outlook, we're expecting full-year adjusted EPS in the range of $3.80-$4.15 per diluted share. This increase, compared to our prior outlook, is being driven by the impact of our share repurchases on full-year share count and a reduction in our tax rate outlook compared to our prior guidance. Turning to free cash flow, we continue to expect that we'll deliver free cash flow of $475 million-$575 million for the full year. Let's turn to Slide 12 and discuss our recently increased share repurchase authorization. As Fred highlighted in his opening remarks, we repurchased approximately $100 million in BorgWarner stock during the first quarter. This brings our share repurchases since 2020 to approximately $733 million. In addition, our board of directors approved an increase in our share repurchase authorization of up to $500 million over the next three years. When combined with the $267 million remaining under our prior authorization, management has the ability to repurchase up to $767 million of the company's outstanding shares. In addition to the share repurchases I just highlighted, we have also returned about $623 million to shareholders in dividends since the start of 2020. We also completed the tax-free spin-off of PHINIA, which returned roughly $1.7 billion of additional capital to shareholders. Adding this all together, BorgWarner has distributed roughly $3.1 billion of capital to shareholders since 2020, while also investing in the company's future. Our return of capital to shareholders has been a significant area of focus over the past several years. We believe our ability to return capital to shareholders while also investing in the business, demonstrates the underlying strength of the company and the importance of a balanced capital allocation approach that is focused on maximizing shareholder value. The $500 million increase in our share repurchase authorization is simply another example of our commitment towards a balanced capital allocation approach. So let me summarize my financial remarks. Overall, we delivered a solid first quarter. Our revenue growth was ahead of our expectations, and importantly, we delivered strong conversion on this revenue growth on an all-in basis. As this is my first call as BorgWarner's CFO, I wanted to share how I think about the key financial goals for BorgWarner for the remainder of 2024 and beyond. As we move forward, I expect the company to, first, deliver organic growth despite volatility in the global BEV and hybrid markets. Second, drive strong incremental margin performance on an all-in basis. And third, generate strong operating cash flow that allows the company to make organic and inorganic investments to support our long-term profitable growth, while also returning capital to shareholders through a consistent quarterly dividend and opportunistic share repurchases. Executing towards these goals is how we measure financial success at BorgWarner, and how we hope to create long-term value for our shareholders for years to come. With that, I'd like to turn the call back over to Pat. Thank you, Craig. Great, we're ready to open up for questions. At this time, I would like to remind everyone, if you would like to ask a question, press star one on your telephone keypad. If you are using a speakerphone, please pick up your handset before asking your question. In the interest of time, please limit yourself to one question and one follow-up question. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Colin Langan with Wells Fargo. Your line is now open. Oh, great! Thanks for taking my questions. You started off very strong here. I think something like 8% growth over market in Q1. Your margins seem to be in the midpoint of your full-year guidance. But the guide for the year implies sort of growth over market, but actually moderate a bit and, you know, maybe at the midpoint, margins wouldn't change. Anything sort of one time in nature we should be thinking about in Q1 that kind of boosted results? And then any reasons we should be thinking about, you know, things moderating a bit as we go through the rest of the year? Thanks, Colin, for the question. You know, nothing unique in the quarter. It was just a really strong operational performance for our business units. They did an exceptional job. You know, as you think about our full-year guide, it implies a 13%-16% incremental conversion, 13% on the low end, 16% on the high end. We feel really good about our first quarter performance, sets us up quite well for the remainder of the year. You know, we're just focused on executing towards the near term, and we're gonna keep doing that as we move into the second quarter. It's just a really good operational performance from the company. Okay, all right, sounds good. Slide eight was pretty helpful. Maybe if you could talk a little about your plug-in PHEV opportunity, you know, the content there, how much of your sales today are there, and have you seen any change yet? I guess it's quite early on, interest in that, given the EPA rules seem to be more favorable toward PHEV. Yeah, Colin, the PHEV is one architecture where we have our foundational products coming in and also most of our eProducts coming in. I don't think we have given the granularity of our per plug-in hybrid content, but on the hybrid overall, full hybrid, plug-in hybrid, and range-extended EV, about 40% of our light vehicle eProduct, which is guided at the midpoint at $1.9 billion this year, is going into those advanced hybrids. Got it. And have you seen any interest in PHEV improve, or is it still just too early? So, globally, the interest of PHEV has always been there. In the US, I would say that it's a little bit early to see requests for quotes from some of the American OEMs. But outside of the US, plug-in hybrids and advanced hybrids are an important part of new energy vehicle, and we have our fair share, we have our fair share of those. Got it. Makes sense. Thanks for taking my question. Thank you, Colin. Your next question comes from John Murphy with Bank of America. Your line is now open. Good morning. I just wanted to follow up on that question that Colin asked on hybrids, Fred. Is there any increase in schedules that you're seeing for hybrids? At the moment, I know you said you mentioned 40% of the eProducts is, you know, the $1.9 billion is on the hybrid side, but and you're not seeing any new activity necessarily. But is there any step-up in schedules for hybrids at the moment that you're seeing that might provide some upside there? Yeah. In China and in Europe, we see upticks in hybrids. Actually, if you look at the share of growth of new energy vehicle in China, actually, hybrids are growing faster than BEV over the past few months. So, and we're part of those. So the answer to your question is, on a global basis, yes, and in North America, it's too early to say. Okay. And then just a second question. You know, there's a debate whether it's stalling, whether it's short term, whether it's long term on EVs. But the reality is, you know, some of your customers, particularly in China and Europe, are heading in that direction, maybe less so in the US than we may have thought. I'm just curious, as you think about your investment, whether it be on the R&D side or the capital invested side, do you have the ability to pull back and maybe spend at a slightly more measured pace? Or is it just because there's such, you know, there's such a push in China and Europe, that you can't pull back and there's, you know, nothing you can really do here other than service your clients as best you can, and try to cut costs to keep it down as much as possible? Maybe you could comment on really what you might think about doing on the R&D side, and then also sort of on the CapEx or capacity add side. Yeah, we are managing our costs holistically in line with the current sales outlook. As Craig and I mentioned in our prepared remark, we are setting up the company to convert mid to high teens, no matter where the incremental revenue comes from. What I would say is, try not to box BorgWarner into a BorgWarner is a BEV player or a hybrid player or combustion player. We are focused on efficient powertrain, and we are now having scale in all those architectures in order to convert mid to high teens, no matter what. And on the capacity side, is there any way to potentially be a little bit more capital efficient, or is that possible? And I would certainly box you into a powertrain tech company across the board. That's where I'd box you, Fred. Didn't mean to put you in one direction or the other. I think from a facility standpoint, we're flexible. For some of the products that I alluded to in the prepared remarks, we have the same engineering, the same, sometimes the same production equipment, sometimes actually the same product. Let me give you an example. We've talked about the past few years of dual inverters for hybrids, and we've talked about inverters for BEVs. Well, those are the same animals. They might not look exactly the same from a space and form perspective, but all the inside of the guts of those things are similar. So it's difficult to answer without a specific program. But overall, we're quite flexible across those different elements that both go in BEVs and hybrids. Great. Thank you very much. Your next question comes from Dan Levy with Barclays. Your line is open. Hi. Good morning. Thank you for taking the questions. Maybe in the quarter, you could just break out what was the split of revenue between eProduct and foundational? And then foundational, I assume, is still putting up pretty solid growth of the market. Maybe you could just talk about some of the dynamics driving that, please. Thank you. Yeah. So Dan, our breakout of eProducts and foundational in the quarter was about $500 million, a little over $500 million eProducts. The rest was foundational. And I'm sorry, your other question just was growth in the quarter? Yeah. Within the growth over market, do you have a sense of what the growth of the market was for foundational and, you know, what regions or products were driving that? Yeah. So I would say overall, the growth was both in China and in Europe. And that includes both the growth that you saw on the foundational side of the business, as well as the eProduct side of the business. And the outgrowth within Foundational was any sense on where that was? You can see a lot of it in the drivetrain side of our business. Great. Okay. And then a second question on margins. And I know you, you've noted that you're aiming for mid- to high-teens incrementals across the business, but maybe you could just give us a sense of, you know, within some of the foundational products, is it possible that we actually are seeing higher incremental margins simply because there's less R&D that you've incurred, less application engineering, more that you are leveraging? Getting a sense whether, you know, there is some split in that contribution margin between eProduct versus foundational. I would say that we are balancing all those costs in order to get to the mid- to high teens, and we're taking that business holistically and taking cost action so that all product lines are being able over time to deliver those incrementals. Okay, thank you. Your next question comes from Noah Kaye with Oppenheimer. Your line is now open. Thanks very much. You know, Craig, after the dividend and the repurchases you've done year to date, it kind of leaves me with around $250 million-$300 million in deployable free cash flow based off of the guide for the year. And I think, you know, we would certainly say that shares are trading below intrinsic value. So how are you thinking about the pace of buybacks for the rest of the year? You know, is this going to be more ratable? Are you remaining opportunistic? Yeah, thanks. Thanks for the question, Noah. So I just want to take a step back. You know, we've repurchased $277 million of the company shares over the last two quarters, so $177 million in the fourth quarter of last year, $100 million in the first quarter of this year. Obviously, pleased with our board of directors, we got that additional authorization. Takes our total authorization up to $700 million, a little over $760 million. We're gonna continue to repurchase opportunistically, just like we did in Q4 and just like we did in Q1. I'd say, as we think about, you know, capital allocation, we take a holistic approach to it. And so we look at liquidity, we look at leverage, we look at is there any short-term funding for M&A that's needed. Obviously, as you mentioned, we have a dividend. That's a fixed obligation. We don't want to turn that on and turn that off. And we look at stock buybacks as a lever as well. So I think as we move forward, continue to think about it, that we'll do it opportunistically. That's how you should think about it. Okay. Helpful. Thanks. And then, you know, good to get the housekeeping on eProduct sales in the first quarter. Just can you give us some guideposts, and even, even getting to the midpoint of guide for the year, around how you're thinking about the cadence of ramp? I know you have some capacity coming online for battery, but, you know, is this a fairly ratable ramp? Is it really heavily weighted to 3Q or 4Q, any particular quarter? Can you just help us think through, you know, how the ramp should proceed over the course of the year? Yeah, Noah. So in Q1, our eProducts revenue went up 25%, and this is in line with our full year outlook of 25%-40% for the year. And you're right, in the next quarter, in our ePropulsion segment, we're launching numerous programs with VW Group, with Daimler, HMC, BYD and others. We're ramping up our battery pack capacity in Seneca and later in the year in Europe. We're also launching in other areas of eProducts. So, you're right, it's gonna increase over the next quarters. Thanks very much for taking the questions. Your next question comes from Joe Spak with UBS. Your line is open. Thanks, everyone. Fred, I know you sort of already touched on plugins a little bit in the Q&A. In your comments, you also sort of talked about, you know, turbos and other sort of core BorgWarner technology that can help with what's seemingly an increasingly choppy powertrain transition. But presumably, you know, your customers would need to do at least some engineering, and it's gonna take time to sort of, you know, have a greater adoption. So what are the conversations like with customers on, you know, some of the traditional sort of core foundational products, and how quickly can we really see, you know, potentially greater levels of adoption there? And Joe, I guess you were thinking about North America here in your question, aren't you? Yes, yes. Yes. Okay. Yeah, because in the rest of the world, as I alluded to before, it, it's happening, right? I think we have all the building blocks to support our customers here in North America as they also want to have those advanced hybrids. I feel that it's still a little bit early to get into the specificities of which products they need from BorgWarner. We are in the early phases of discussion about architecture, so I think it's gonna take a little bit more time. Okay. And Craig, you know, we obviously great job sort of managing to the all incrementals. You talked about continuing to manage to that. And I think in the past, you know, you talked about on the foundational side, right, if things continue to go down, you know, you'll look to restructuring or some pricing actions. But I'm curious, on the other side, just given not what's still a mid- to long-term sort of trajectory towards electrification, but certainly a lot of volatility on the programs within that, is there an opportunity, not this year, because it's probably locked, but is there an opportunity as you think about R&D for next year to maybe push some of that? Or is there even a pricing opportunity on some of the products stuff if the volumes don't hit certain thresholds? Yeah, Joe, you may have seen that our ePropulsion segment is running at about 30% incremental year, and we're not satisfied with that, so we'll take some steps to improve the margin performance. And again, we have a strategy to adjust costs to wherever the market is going, and we are doing that wherever it is necessary. And this is what we're looking at right now. If one follow-up, like, on the incrementals on the decrementals, I guess the battery stuff is not in eProducts, so never mind. That's right. I retract the question. Yeah. Thank you. Yeah. Thank you, Joe. Your next question comes from Douglas Benton with Evercore ISI. Your line is open. Hey, team. Thanks for taking my question. Just a quick one here and then one follow-up. Can you maybe tell us the percentage of your orders from those Chinese domestics and how that compares to the percentage of anticipated recognized revenue from that same group for 2024? You're talking about eProducts? Correct. Yes. So on eProducts for 2024, about 45% of the $1.9 billion in light vehicle is for China. Within that, 95% is for the Chinese OEMs. Okay, great. Thank you. And then just on a more granular note, can you maybe quantify the exposure you have to some of those newer growers in China? You know, the BYDs, Xpengs, Xiaomis of the world. I unfortunately can't disclose some of those names, and I can't disclose which product we have with those names in particular. So not that I would not love to do it, but I just can't. Okay. Gotta ask the question. Thank you very much. Your next question comes from Alex Potter with Piper Sandler. Your line is open. Great. Thanks, guys. So first, maybe following on that question from China, I'm interested in, I guess, hearing your opinion regarding the degree to which China, that market, can serve as maybe a foreshadowing or a harbinger of the way the rest of the world will evolve. Obviously, China's been moving much more quickly toward electrification. There's a lot of dynamism regarding the architectures that those new companies are pursuing. Do you think that China represents the way the rest of the world will eventually evolve, or do you see those markets sort of trending in different directions with China doing its own thing and the rest of the world doing their own thing? In China, under the umbrella of new energy vehicle, you will see that, hybrids, essentially the advanced hybrids are having about 40% shares in China, and actually growing faster within that segment, or growing the fastest within that segment. That is also our ratio of eProducts versus eProducts within hybrids and BEVs. For us, I wouldn't say that it doesn't matter, but it kind of doesn't matter. We have the right product portfolio to support customers around the globe, and we don't, we're not attached to any regional specificities. We are resilient to any propulsion scenarios, pure combustion, hybrids, or BEVs. So I'm not. I don't have a crystal ball. I won't, you know, I can't tell you China is a good proxy for the rest of the world, but we believe that you will see a variety of electrified propulsion architecture, and we're ready to support those on a global basis at both. Okay. Yes, good. Very clear. Maybe the other question, more of a near-term tactical question. On another call this morning, one of your peers noted, particularly over the last couple weeks or several weeks in the month of April, some real volatility and generally downward adjustments to production schedules at the OEMs. Have you seen anything similar to that? I know that your overall market projections haven't changed versus last quarter, but anything you'd be willing to say regarding near-term or back-half production schedules would be helpful. Thanks. Yeah, I don't have the granularity of what happened over the past two weeks, but overall, for the full year, our view of the market is already below companies like IHS. But we will adjust to whatever comes to us. Great. Thanks, guys. Your next question comes from James Picariello with BNP Paribas. Your line is open. Hi, everybody. Just back to eProducts, based on the first quarter's performance and the visibility into the year. Could you just speak to our battery systems revenue? I believe this business, the guidance called for $700 million-$800 million in revenue. Just curious if there are any moving pieces tied to this within the eProduct range. And can you clarify what portion of this year's eProduct sales attributes to hybrid? Thanks. So this year's guidance, $2.65 billion for eProducts at the midpoint, out of which $750 million are battery packs for commercial vehicle. So $1.9 billion is for light vehicle, 40% of which is for hybrids on a global basis. Regarding your first question on battery packs, there is nothing particular in Q1. The ramp-up is to plan, and what we see in Seneca and the preparation of increasing capacity in Europe is also in line with our expectations. Yeah. Well, that's helpful. And then just as we think about foundational profitability versus eProduct the rest of the year, and I think this touches on Colin's question regarding margin cadence, given that the first quarter was squarely in line with your full-year range. As your eProduct revenue improves sequentially through the remainder of the year, is it safe to assume that the margin loss rate also improves? And so my question, if that's true, my question is, why would the foundational profitability degrade through the year if, you know, if the full-year guidance range is the right number? If that makes sense. Thanks. Yeah. I think the way we're looking at it is we're focused on executing at the mid to high teens on an all-in basis, you know, wherever that growth may come from. So I think that's how you should think about it. You know, we're really pleased with our 23% all-in in the first quarter. We think it sets us up quite well to execute for the full year. So that's how we're looking at it. You know, we're really focused on incrementing at an all-in basis, regardless of where that revenue growth comes from. Okay. Thank you. Your next question comes from Luke Junk with Baird. Your line is open. Good morning. Thanks for taking the questions. First, looking at the segments, just hoping you can maybe unpack the top-line strength that you saw year-over-year in drivetrain and battery systems. This quarter sounded like that was foundational related in large part, maybe just, sustainability of that strength. Then the margin there stepped up nicely sequentially, especially as well. I don't know if there's anything specific to point to. Thank you. Yeah, I would say it was just overall good performance from a margin perspective. Again, 23% all in, great performance by our business units. When you think about growth, it's really China and Europe. both on the foundational side of the business and on the battery side of the business, particularly in that DBS segment. But we also had nice growth overall, just in general, both in China and in Europe. But again, you can see most of it in the DBS segment. I would. That's where I would point you to. Got it. And then for my follow-up, maybe a bigger picture question, Fred, and just thinking about eProduct, net engineering requirements going forward, both as, you know, you think about on a, a growth basis and, you know, epropulsion margins, you know, going forward here, and how you can improve those margins. But I'm also wondering, just given some increases in uncertainty in the West, if you can push for more engineering recoveries as you book business or build in structures to pay for more of that engineering? Yeah, I mean, we're looking at all this from an engineering recovery. We're also looking at adjusting costs, especially in those segments for which growth is not happening as fast as we thought, in order to improve the margin performance. So in those eProduct segments, we fully expect this business to grow going forward and with those upcoming cost actions, to get to mid-to high-teens incremental when it ramps. Got it. Thank you. We have time for one final question, and that question comes from Mark Delaney with Goldman Sachs. Your line is now open. Good morning, and thanks for fitting me in. I think that a part of BorgWarner's customer value proposition for eProducts has been that utilizing BorgWarner's power electronics products can be a more efficient way for OEMs to do business. I'm curious if you think that played a role in some of the wins you were able to announce today. And, you know, given the challenges that a lot of the OEMs are dealing with in BEVs, and a lot of the price competition, might that be an opportunity for your bookings to outperform some of the broader market trends if some of these customers do need to find ways to be more efficient? Well, you're absolutely right. Power electronics is a key strength of the company. Borg has always been focused on efficient systems and efficient mobility, and power electronics is the new frontier of efficiency in BEV and/or hybrids. Fighting against those switching losses and fighting against those mechanical losses downstream the inverter. So the answer to your question is absolutely yes, we're focused on that and, at the system level, at the power electronics level, at the power module level, and that's, that's our DNA. That's what we do best. Thanks for that, Fred. And on eProducts, the company reiterated the $2.5-$2.8 billion eProducts revenue outlook for this year. You know, of course, we've seen a lot of volatility in light vehicle BEV plans, and so as we've seen that, I'm hoping to better understand, do you think that the 2025 outlook that you've previously communicated in eProducts of $4.5-$5 billion is something you still see as achievable? And as you think about that, you know, the revenue ramp and what may be for 2025, maybe you could also touch on how you're thinking about eProducts profitability, not only this year, but into 2025. Thanks. So you're right. It will absolutely depend upon customer volume, and that will ultimately decide what 2025 will be. We are, as we mentioned, focused on what we can control, which is securing new businesses in eProducts for BEV and hybrids. Focusing on strengthening our portfolio for it to remain in a great position and managing our cost in order to overall deliver mid-teens to 18% incremental on an all-in basis. That's our focus, and we'll give you more color on 2025, closer to 2025. Understood. Thanks. Thank you. Thank you all for your great questions today. If you have any follow-ups, you can follow with me or my team. With that, Brittany, you can go ahead and conclude today's call. That does conclude the BorgWarner 2024 first quarter results conference call. You may now disconnect.