Good morning, and welcome to PACCAR's Q3 2023 earnings conference call. All lines will be in listen-only mode until the question and answer session. Today's call is being recorded, and if anyone has any objections, they should disconnect at this time. I would now like to hand the call over to Mr. Ken Hastings, PACCAR's Director of Investor Relations. Mr. Hastings, please go ahead. Good morning. We would like to welcome those listening by phone and those on the webcast. My name is Ken Hastings, PACCAR's Director of Investor Relations, and joining me this morning are Preston Feight, Chief Executive Officer, Harrie Schippers, President and Chief Financial Officer, and Brice Poplawski, Vice President and Controller. As with prior conference calls, we ask that any members of the media on the line participate in a listen-only mode. Certain information presented today will be forward-looking and involve risks and uncertainties, including general economic and competitive conditions that may affect expected results. For additional information, please see our SEC filings and the investor relations page of PACCAR. I would now like to introduce Preston Feight. Hey, good morning. Harrie, Brice, Ken, and I will update you on our record Q3 financial results and other business highlights. PACCAR's outstanding employees delivered this excellent performance by providing our customers with the highest quality trucks and transportation solutions in the industry. PACCAR's Q3 net income increased 60% year over year to a record $1.23 billion, and revenues increased 23% to $ 8.7 billion. Truck, Parts and Other gross margins expanded to 19.5% in the Q3, compared to 14.9% in the same period last year. PACCAR's global investments in innovative new DAF, Kenworth, and Peterbilt trucks, as well as investments in technology and manufacturing, were key elements in delivering this strong performance. PACCAR Parts Q3 revenues increased to $1.58 billion. Parts pre-tax profits were $412 million, or 10% higher than the same period last year. PACCAR Parts provides its customers with industry-leading technology that enhances their uptime. PACCAR Financial earned a strong pre-tax income of $134 million in the Q3, reflecting its high-quality portfolio. We estimate this year's U.S. and Canadian Class 8 market to be in a range of 295,000 to 315,000 trucks, and next year to be in a range of 260,000 to 300,000 vehicles. Customers are replacing their trucks with the new heavy- and medium-duty Peterbilt and Kenworth models that enhance their operational efficiencies, achieve industry-leading fuel economy, and attract and retain the best drivers. Demand is strong for Kenworth and Peterbilt trucks, with the Q1 of 2024 filling in quickly. In Europe, this year's truck industry registrations in the above 16-ton segment are estimated to be in a range of 310,000 to 330,000 vehicles. The 2024 market is expected to be in the range of 260,000 to 300,000 trucks. The new DAF trucks have redefined the premium truck segment in Europe and offer superior aerodynamics, award-winning fuel economy, and enhanced features that make them the driver's choice. The South American above 16-ton market is projected to be in a range of 105,000 to 115,000 trucks this year and in a similar range next year. DAF Brazil recently celebrated its tenth anniversary and has increased its greater than 16-ton share to a record 10%. The DAF lineup of trucks is performing exceptionally well for customers in all Brazilian operating environments. PACCAR recently announced its participation in a new battery cell joint venture. The joint venture will be located in the United States and will manufacture battery cells for use in medium- and heavy-duty trucks. PACCAR's proprietary battery cells will create value for our customers and help them achieve their future operational and environmental goals. PACCAR's employees and dealers are delivering excellent results for our customers, and we're excited about the future. Thank you. Harrie Schippers will now provide an update on PACCAR Parts, PACCAR Financial Services, and other business highlights. Thanks, Preston. PACCAR delivered 50,100 trucks during the Q3. We estimate Q4 deliveries to be similar and in a range of 48,000 to 51,000 trucks. More production days in the Q4 in Europe will be offset by fewer production days due to holidays in North America. The supply base is improving but continues to limit production. Truck, P arts and Other gross margins increased to 19.5% in the Q3. We anticipate Q4 gross margins to be around 19%, reflecting the strong performance of our new truck models and PACCAR Parts. PACCAR Parts delivered Q3 gross margins of 31.5%. PACCAR Parts' innovative programs, such as advanced fleet management services and predictive dealer inventory management, help customers increase vehicle uptime and their financial performance. For the Q4, we expect parts sales to be 7% to 9% higher than in the same period of last year. PACCAR Financial Services results in the Q3 benefited from excellent portfolio quality and positive used truck results. Pretax income was $134 million. PACCAR Financial is the market leader, supporting the superior Kenworth, Peterbilt, and DAF products with innovative technologies and a strong global used truck network. In the last two years, DAF, Kenworth, and Peterbilt have introduced more new truck models than at any comparable time in the company's history. The pace of these introductions continues with the new flagship Peterbilt Model 589 that begins production in the Q1 of 2024. PACCAR's capital investments in new and expanded facilities, innovative products, and new technologies have created the highest performing trucks and transportation solutions in the industry and will contribute to excellent financial returns for many years. PACCAR's return on invested capital further improved to an industry-leading 35% in the first nine months of this year. This year's capital expenditures are projected to be between $650 million and $675 million and will increase to $675 million to $725 million next year. Research and development expenses will be $410 million to $420 million this year and increase to between $470 million and $520 million next year. In addition to the capital and R&D investments, the company will own a 30% share in the battery cell joint venture and expects to invest $600 million to $900 million over the coming three years. With the most advanced truck range in the industry, efficient investments, strong aftermarket parts and financial services businesses, and exciting new strategic opportunities, PACCAR is positioned well for the future. Thank you. We would be pleased to answer your questions. Thank you. As a reminder, if anyone would like to register a question, please press star followed by one on your telephone keypad. When preparing to ask your question, please ensure you are unmuted locally, and if you would like to withdraw your question, please press star followed by two. So that's star followed by one on your telephone keypad to register a question. Our first question today comes from Tami Zakaria from JPMorgan. Tami, please go ahead. Your line is open. Hi, thank you so much for taking my questions. So my first question is about parts growth. I think, in the press release, we said you're opening a PDC in Germany next year. So how should we be thinking about parts growth in 2024, in terms of how long does it take a PDC to sort of ramp and reach run rate capacity? How to think about growth overall, if you could give some color on that, that would be very helpful. Sure. Happy to start with that, and Harrie can add anything he wants. You know, I think what Harrie shared with you is that we think parts growth is going to be in the 7% to 9% in the Q4. And to your point on the effect of a PDC, it's almost immediately good for the business, right? What a PDC does is it allows us to have closer points of contact with our customers, get them parts in a more quick way, and support their businesses for more same-day or next-day parts delivery. So it's really quickly beneficial to them, Tami. Got it. That's, that's very helpful. And then, how should we think about decremental margins next year, given you're expecting truck sales down both in Europe and U.S., Canada? You know, I think what we've been able to do in the last few years, and we shared this, is we've introduced more new product than any time in our history, and we continue to do that with the new Peterbilt Model 589. Those products are doing exceptionally well for us in the marketplace, so we're pleased with how they're performing, and that means performing for our customers, so they're getting value out of that. I think we'll watch how the market develops for next year, and we'll have a lot better insights into margin and what's going on as we get into the Q1 for 2024. Okay, great. Thank you so much. You bet. Thank you. Our next question today is from Steve Volkmann from Jefferies. Steve, please go ahead. Your line is open. Hi. Good morning, everybody. Thanks for taking the question. Preston, I think it was you who was talking about the launch of the new Peterbilt, I think, in January of 2024, you said. Sorry if I got that wrong. I'm just curious, how big of a launch is that? You're right. Okay, great. How big of a launch is that? How much of your, of your North American revenue could that be? And where I'm trying to go with this is, you guys always seem to engineer in sort of higher margins as you do these changeovers, so I'm trying to figure out how much of a tailwind that might be in 2024. Hey, Steve. Well, well, first of all, I mean, the thing about it, what we try to engineer in is higher value for our customers, and I think that that's what we've been able to do with these new products. The 589, well, the right word is it's cool. When we did the introduction for it, it was just exciting to see it. It's gonna be iconic in the industry. It looks fantastic, and I think it'll be a great flagship for the Peterbilt team. As far as percentages, maybe, Harrie, you wanna- The 589, Steve, will replace the 389, and a good way to think about it, the 389 is now about 20% of Peterbilt's production. So maybe 6 to 7% of PACCAR's total production, and the 589, like I said, will replace it and maybe grow even a little bit more. ... Great. Okay, thank you for that. And then, my follow-up is on the financial services, Harrie. I'm curious, obviously, it was down a little bit year-over-year. How do the higher rates that we're seeing in the market kind of layer in? Because obviously, you get some income, I guess, on your cash balances, which is great, but then there's probably some headwinds in the finance book, and I don't know, just any color you could give us on that would be great. Yeah, the portfolio quality, Steve, continues to be very strong. We have a portfolio of almost $20 billion now, with past dues less than 1%. So yeah, higher interest rates do drive higher payments for our customers. But with all the new products that we launched that have better fuel efficiency, they do see savings on the fuel bill that more than offset the higher interest payments in today's environment. Okay. Thank you, guys. You bet. Thank you. Our next question is from Chad Dillard from Bernstein. Chad, please go ahead. Your line is open. Hi. Good morning guys, First question. Good morning For you is, how much visibility do you have into engine rebuilds? And what does it tell you about your engine parts demand or what it could look like more broadly into 2024? Well, I think we have pretty good visibility to the life of the engine, so our parts team does a fantastic job of tracking miles, or a lot of our vehicles are connected, so we get to see what miles are accumulating. We obviously manage what's going on from an engine parts utilization standpoint, and then as the population is still reaching a point of maturity, we expect to see the amount of rebuilds increasing over time. So that should be still accretive to the parts business. Got it. That's helpful. And the second question, can you talk about your approach to managing the growth air pocket in 2024? You know, just given that we do have a pre-buy ahead of the 2027 emission standards, that could probably start in 2025 and 2026. Just want to get a sense for how you're thinking about, you know, labor, line rates, you know, maintaining your suppliers so you can, you know, catch the rebound. Yeah, I think that what we see is, right, and we've been talking about this for a little while with you guys, is our approach has been to spend money in research to make sure we have the right products sitting out there, and we do. So we're really well positioned with the newest product lineup. That matters a lot. And then I think where we're sitting in time is markets that haven't been able to be fully met for a few years, and now people are starting to think about what the future might be in terms of 2027 emissions, which could make this a stronger for longer, kind of a, a good approach. Obviously, your word was air pocket. I got to tell you, I've never heard that word before, but, I'll use it with you. If there's an air pocket next year, we'll see what that looks like as we get into 2024. Great. Thank you. You bet. Bye. Thank you. Our next question is from Rob Wertheimer, from Melius Research. Rob, please go ahead. Your line is open. Yeah, one market question, then, hopefully, a more interesting strategic. So just, just on the outlook, is there any material mix shift, you know, kind of coming through in your customer conversations or order flow towards vocational? And just in general, does that outlook, you know, anticipate a decline in sentiment, or does it, you know, sort of follow along with one you've already seen in the customer base? Oh, Rob, I think you're paying attention to what's going on. I mean, we do see a really strong vocational market out there, and we see a strong medium- duty market. The LTL market is very strong. And then, as we were talking about in the last question from Chad, the idea that I think customers that are sophisticated are paying attention to the next few years and want to keep their fleet age at a low level. So there's a lot of contemplation for them to stay on a smart buying cycle for them. And frankly, as we've said, and we keep saying, right, these new trucks are providing good value to them, so there's a reason for them to keep buying trucks. I think that all factors into where we think the market is going to be, looking forward. Okay, perfect. And then another one, just on the battery investment. This has been a subject of some debate, as your future trucks will presumably have higher content, you know, with batteries and/or autonomy and, and other things, but just sticking with the batteries for the moment. And some question as to whether those batteries would be commodity provided by somebody else or, more individually designed for your trucks, you know, by you. And this seems to lean in the latter direction. I wonder if you could comment on, you know, the proprietary nature of it, the chemistry, and, you know, what you expect on, you know, this investment and the timing of when those trucks might actually, you know, start to roll in numbers to market. I'll stop there. Thanks. Yeah, there was a lot of questions in there, but let me kind of give you an overview and come back into it if you want to. Sure. So what we see is, as we move forward, there's going to be a host of technologies employed for how we use motive power, and clean diesel is going to be part of it. We obviously think that batteries are going to be part of it, as we did this joint venture into proprietary battery cells. And we think that hydrogen can play a role as well, whether that's internal combustion or it could be through fuel cells. But in the case of batteries, when you create a battery electric vehicle, the cost of the vehicle is highly impacted and influenced by the cost of the battery. So having it be more vertically integrated is an advantage, we think, for our customers, and gives us an ability to control both the energy in the battery as well as the battery energy management system to the vehicle. So we felt like getting involved in that space was important, and we think it'll be a few years before it develops. Obviously, we don't have our regulatory approvals yet, and so we'll give a little bit of caution that we need those approvals for forward-looking, but that feels like it's going in a good direction. And then, as I think about the kinds of chemistry you asked about, the technology we've chosen is LFP, lithium iron phosphate, or some derivative of that, that we might use. And the benefit of that is it's a safer battery chemistry. It doesn't rely on rare earth minerals, it's more durable, it's faster to charge, and it has a better life capability, so, and a better cost structure. All of those factors were the reason we chose that technology, and I give huge, huge credit to our technology teams that have thought this through for the last several years as they made this decision and got us going on this great path. Thank you. You bet. Thank you. Our next question is from David Raso, from Evercore ISI. David, please go ahead. Your line is open. Thank you very much. The comments earlier about the Q1 of 2024 are starting to fill up quickly. Can you give us some insight on how the pricing is for those Q1 deliveries, and then maybe a sense of the cadence year-over-year that you expect the U.S., Canada down 8% to play out for the industry, the industry? Thank you. Well, I think if you, if you think about pricing, what we did is we shared with you where our vision is best, David, and that's at the Q4. So that's where we gave you a gross margin expectation of around 19%. And as I said, it's filling in quickly. But I think that the key we've been focusing on is making sure that customers do realize the value of the products. They are, that factors into the pricing, obviously, and I'll say it's a competitive world out there. So I think it's a look forward to having the conversation with you on pricing and what's going on in the marketplace as we get into the earnings in the Q1 there. So that is where that sits. From a secondary question of cadence, you know, I think we're seeing, as I said, the Q1 looks pretty good, and I think that the overall sentiment is, while there may be some moderation in truckload, people are trying to figure out how to think about the next three years. And so I'm not smart enough to know what Q2, Q3, Q4 are gonna look like. We just feel like, we'll see some adjustments there from this year, but that it should still stay at, like, a replacement demand level. That's helpful. The order book right now, how far can the dealers order out to, say, U.S., Canada, into 2024? Looking at the first half. First half. Okay, thank you so much. You bet. Thank you. Our next question is from Jerry Revich, from Goldman Sachs. Jerry, please go ahead. Your line is open. Yes. Hi, good morning, good afternoon, everyone. Hey, Jerry. I wonder if we just talk about the new product portfolio, I mean, in Europe, I think your profitability per truck has doubled with the new products, similar on the medium duty product lineup. Is it possible, Harrie, for us to have a discussion of what proportion of the portfolio fits this new product paradigm versus the type of rollouts that we have still in front of us over the next couple of years? How far away are we through rolling out this new higher margin portfolio that seems to be a big step higher for you folks? And the new DAF is currently a little over 80% of all the trucks that DAF is building. And remember, DAF is also building trucks for export outside Europe. But I would say within Europe, almost all the trucks that we're selling are the new DAF with the improved aerodynamics and the better fuel economy, because that's what customers want. And then going forward, yeah, we'll, we're planning to bring that new DAF product also to other markets. And any market where we're currently selling DAF is an opportunity to sell the new DAF in the future. Sorry, Harrie, can we expand that conversation in North America as well? So with the 589 rolling out, what's the remaining opportunity within the book for upgrades that you folks have planned? Well, like I said, the 589 is, the 389 is 20% of Peterbilt's production, so it's about 6 to 7% maybe of PACCAR's production. So with the 589 replacing the 389 next year, it'll be a similar percentage, I would think, as the 389 is today. And there's a pipeline for new products from there, it sounds like. Of course, yeah. I'll help a little bit here is like, you know, you see what our R&D numbers are for like next year. We think there's a ton of great projects that we have out there that provide good value to our customers and shareholders, and so we, that pipeline is very full. Okay, super. And can I ask on the battery electric investment, you know, you folks have really good connectivity with your clients on the consultation side. Once you get the plant up and running, how quickly, based on your conversations, do you think demand will ramp up? You know, how big are the concerns around the utility's ability to keep up versus, you know, having a product that's gonna be producible at scale that you folks are effectively gonna be solving for the industry in 2027? Yeah, I think you, I think you just captured the issues that are unknowable at this point right now. Regulation is a factor, energy is a factor, infrastructure is a factor, and the rate of adoption for EVs, price is a factor as well. What our position is as PACCAR is we want to make sure that we offer our customers the right solutions, right? So we make the investments now. We're less concerned about whether the adoption curve is rapid in 2027 or if it's 2028 or whenever it is. We'll have great diesel engines, we'll have great electric vehicles, we'll have great hydrogen vehicles, and that puts us in a position of supporting their needs, regardless of the circumstance. Sure. I appreciate the discussion. Thank you. You bet. Thank you. Our next question today comes from Steven Fisher, from UBS. Stephen, please go ahead. Your line is open. Thanks. Good morning. Preston, you gave us some reasons for generally high margins in terms of the investments in technology and manufacturing, but I guess what was so much better than you expected in margins in the quarter and at the TPO level? I mean, still like, 100 basis points above your midpoints. Just curious, kind of, was there any one of those factors or just conservatism that you're now baking into your numbers? You know, I think that we, as we've shared with you and Steven, is that we're looking at the steadiness of supply has been improving, but we've certainly had some impacts from that, so that's a factor in there. I think that our rest of world markets are doing exceptionally well for us in addition, so that's a factor in there as well. And, you know, we just had a smoother set of builds that probably happened for us, and those are probably the biggest things. Okay, that's helpful. And then I'm curious, what indication do you have from your suppliers for costs on 2024? At this point, does it make sense to assume that the costs are generally going to be higher? And do you have an overall sort of cost strategy, as you think about framing up 2024 at this point? Yeah, I think that as you can see, you know, we see various commodities moving in different directions, some moving in a downward position, some moving up, and obviously there's some labor pressure. Those are probably the biggest influencers on cost right now, and I think that we'll look at 2024 when we get into January and see how that's looking then. Okay, just take one quick clarification. The cost you mentioned on the R&D... Or sorry, on the new battery plant, how does that flow through the financials? Is that going to be an, is that part of R&D costs, or where does that flow through? That, that won't show up as R&D. It'll show up as an investment, as part of our 30% investment in the joint venture. Okay. Very good. Thank you. Thank you. Our next question is from Tim Thein from Citigroup. Tim, please go ahead. Your line is open. Great. Thank you. Good morning. The question, I just wanted to come back, maybe Preston, a little bit higher level, thoughts on parts in 2024. If you look back, you know, historically, there has been some relationship when PACCAR's truck volumes decline and, you know, industry profitability comes under or is under pressure, that has weighed on parts sales. Obviously, not nearly the same kind of magnitude, but just as you... You know, but we're coming through, you know, weird times from a inventory stocking levels, and I can imagine that maybe there was some restocking that helped parts growth this year. But as you just kind of weigh this all together, in an environment where global truck volumes are declining and, you know, and from what we can observe, you know, trucker profitability in developed markets under some pressure, how do you think that all comes together in terms of PACCAR's parts sales in 2024? Any just. Yeah, sure. I know you're not going to give a point estimate, but just how you're thinking about that for 2024. Absolutely, Tim. Fun to talk about it. I think that the overarching view I take of it is our parts team has done a great job of transitioning over the past several years. They're not really parts providers, they're transportation solutions providers, right? So they're thinking about what's valuable to the customer and what's valuable in the engagement with the dealer, and they've done a really good job of that, and I think that's foundationally lifted their performance over time, which goes along to the, was it roughly 9%, per year growth they've had over the past 20 years. So I think that they've done a really nice job of continuing to evolve the business through the application of technology and analytics, and I expect that that will, over the medium term, continue, and long term, continue. So positive in that regard. I heard everything you said about the sensitivity to market. There's truth in that as well, and that way, we'll just look at what 2024 does then. Okay. All right, fair enough. And then, maybe one, just from an inventory level at your dealers, both new and used, just where do we sit there? Yeah. I guess, you know, kind of the related question is, is the appetite for dealers from a stocking perspective in 2024, just where does that sit? I'm sure it varies by geography, but maybe just some thoughts on that. Thank you. Yeah, very, very good, Tim. You did ask that the first time. Sorry, I missed it. We've saw that there was some probably strong interest in having enough inventory when supply was limited, and I think that that was then mitigated for a little bit. I would say things are more back to normal in terms of overstock, destock, and kind of sitting at a level where inventory feels like at a rational and healthy level for our dealers now. All righty. Thank you. You bet. Thank you. Our next question today is from Nicole DeBlase from Deutsche Bank. Nicole, please go ahead. Your line is open. Yeah, thanks. Good morning, guys. Hey, Nicole. Maybe just starting on Europe. So obviously, a lot of talk about U.S. and Canada on this call, but what are you guys seeing from an order perspective within Europe that's kind of underpinning a weaker outlook for 2024 relative to the U.S.? Yeah, I think that what we're seeing in Europe is like, you know, we have good fill going into the Q1. It feels like the general economies over there feel a bit more moderated than they are here, and so there's probably more contemplation going on within the customer base there. ... Okay. Okay, makes sense.[crosstalk] No, I think that's absolutely correct, Tess. The market is a little bit softer there, and that's why we're forecasting a market between 260,000 and 300,000 for next year. So that's somewhat of a decline compared to this year. Understood. And then in the U.S., can you just speak to a little bit of what you're hearing by customer size? So any major divergence in order activity from, like, small versus medium versus large fleets? I think it's kind of interesting, is that, like we said earlier in the, in the macro scale of it, there's a lot of sectors that are doing exceptionally well right now. The vocational sector is probably just spinning up. It's a very strong sector for PACCAR in North America, with Peterbilt and Kenworth having roughly 40% of that market, so that's good. See some real strength in the LTL market as well. See real strength in the medium-duty market as well. As I shared earlier, I think that the large truckload carriers are contemplating what they're going to do and thinking about the next three years and keeping their fleets at a young spot. And I think for all our customers, there's the advantage of the new truck, right? If the truck is providing a 7% benefit in fuel economy, it's compelling reasons to buy that truck, plus the drivers love it. So those things factor in, and that kind of gives you a walkthrough across the sectors of the market. Perfect. Thank you. I'll pass it on. You bet. Thank you. Our next question is from Matt Elkott from Cowen. Matt, please go ahead. Your line is open. Good morning. Thank you. Your 2024 US and Canada Class 8 forecast, it reflects what seems to be a smaller decline than some may have feared. My question is, given you guys have higher exposure to infrastructure than some of your peers, do you think PACCAR can do even better than this forecast in the US, that is? Better than the forecast in terms of? A smaller decline even than the 8% that you're expecting for the industry. Our strong presence in the vocational segment, where we have 40% market share, that strength obviously should translate into PACCAR doing really well next year. Okay. But so relative to the industry forecast, you think you might be able to outperform, or you're not ready to say that? Well, I think what we did is we gave the forecast with the range because that's what we think the range could be, right? That's why we came out 260 to 300, is because that's how we see it. Okay. And then just one more follow-up. If we do have a higher mix of vocational in the next year or two, can you just talk a bit more about what it could mean for, you know, margins and pricing, and as well as, you know, the kind of fluidity of the manufacturing process? Well, our truck plants, and it's a good opportunity. Thanks for bringing it up. I mean, the mixture and how that works is our truck plants have just done an absolutely amazing job around the world, managing the last few years, and they are artisans at being able to build the trucks that they need to build, so I couldn't be more proud of them and pleased with the results that they've delivered. And I think that if we see mix shifts from on-highway into the vocational market, that's very adaptable for us. We can build any truck in our factories that we need to, and they're very good at putting those trucks out, so I think that that'll be just fine for us if we see that shift, i It'll be good for PACCAR and good for our customers. Great. Thank you very much. You bet. Thank you. Our next question is from Jeff Kauffman from Vertical Research Partners. Jeff, please go ahead. Your line is open. Thank you very much, and congratulations. I want to think a little bit, you're welcome. I want to think a little bit about this, joint venture. So you said... I guess two questions. Number one on CapEx. You said $600 million to $900 million. Let's assume that you can get all of the, approvals that you need. Does that imply when we're thinking about 2025, 2026 CapEx, we could be looking at $1 billion+ in terms of total firm CapEx? That's question one. Let us go for that question, then you can go to your second one. Harrie will probably take it. So the $600 million to $900 million investment in the joint venture will be showing- Mm. showing up as an investment. It will not show up as our capital investment plan. Okay. The capital numbers you just mentioned I appreciate that. for this year and next year are without the joint venture. Okay. Thank you. And then question two, you know, I'm thinking back to the future here, 21 GW at the factory. Love it. You know, I want to bring it into something that I can convert into trucks. So if I think of 21 GW, and maybe your smaller trucks are 250 kWh to 300 kWh batteries, and your larger trucks are kind of 600 kWh to 750 kWh batteries, I'm just going to take an average of 500. Are we talking about kind of 40,000 to 50,000 vehicles a year that this plant could theoretically battery, and then you would have a 30% interest in that that shows up as other income, investment and joint venture? Yeah, Jeff, that is perfect math. I think you can use that, and you probably can go back to the future with that. Awesome. Thanks so much. Have a great day. You too. Thank you. Our last question registered is from Scott Group, from Wolfe Research. Scott, please go ahead. Your line is open. Hey, thanks. So I just wanted to just follow up on one of the earlier questions. What percentage of your mix is typically the large truckload? And then within the 2024 trucks. Is there any change in mix of sales with the MX versus not? Is that mix going higher or lower? On the mix of sales, I mean, I think that you can kind of see variance within the model, right? I think if you're asking, it's like you could look at fleets and customers in the mid-sized, over-the-road segments being a big part of it. Vocational is kind of a part of it. Then the LTL is a part of it, in the greater than 16-ton Class 8 markets. And I think that they split up as the biggest part of that is the truckload, and then obviously the LTL combined, and then you get into the vocational behind is next behind that. So that's kind of how we think of it, and we don't really worry through what the percentage of each will be because there's such overlap between them. Then any changes again in what you're selling for 2024, if MX penetration is higher, lower, unchanged? Yeah, we think the MX engine is going to be doing really well next year, right? It was 43% of our build in the quarter, this quarter, and we expect to see that growing. We've been working through supply constraints on it, and as we've worked through that, we think there's great upside for that next year. Okay. Any color on how to think about the FinCo margins from here? Lost provisions up a little bit, but how do we think about FinCo from here? Yeah, the FinCo should continue to do strong in the Q4 and next year. Credit losses were $6 million in the quarter, but that's really a very small number to the total, almost $20 billion portfolio. So excellent credit quality, and like I said, we expect the finance company to continue to do well. Okay. And then if I could just ask one more, just big picture. I know there's been a lot of questions about gross margin, but, you know, you go back 30 years, it's, it's never—you've never had a year at over 16%, and, and this year is going to be over 19%, so it's a lot of what you've been talking about. I guess, what do you think is the right—what's the new range that you would think about through a cycle for, for PACCAR gross margin going forward? Well, I think that the reason we've seen that gross margin is because there is an incredible team of people at PACCAR that are working every day to give our customers great value, and they're succeeding in that. It's a huge part of it. We have a fantastic dealer network. They're doing a great job, and I think our customers are seeing the value in that as well. So that's the overarching things that are driving it up, and we aim to continue to deliver on that. I think predicting the future gets a little risky, and we'll look at how that comes through. It depends on the cycles and everything else, but I can't be more pleased with how PACCAR is positioned for the future and what it'll be able to, able to deliver. All right. Thank you, guys. Appreciate it. You bet. You bet. Have a good day. Thank you. This is all the questions we have today, so I'd like to hand back to management for any closing remarks. We'd like to thank everyone for joining the call, and thank you, operator. Thank you, everyone, for joining today's call. You may now disconnect your line, and have a lovely day.