Dana (DAN) J.P. Morgan Auto Conference 2024 summary

Electric vehicle market outlook and strategy

• EV adoption forecasts have been tempered due to infrastructure and price challenges, but long-term expectations remain positive for both light and commercial vehicles.

• Short-term pullback in EV growth is mainly in passenger cars, with less impact on light trucks and commercial vehicles.

• Modular capital investment approach allows flexibility in response to slower EV adoption, reducing near-term spending.

• Product portfolio is energy source agnostic, supporting ICE, hybrid, and BEV platforms.

• Backlog is about 75% EV, with strong growth in battery and electronics cooling products.

China and global market opportunities

• Chinese automakers' rapid electrification and market share growth present new partnership opportunities.

• Existing business in China is modest, focused on light trucks and all-wheel drive SUVs, with ongoing efforts to expand.

• Product scalability enables participation across vehicle sizes and types, including last-mile delivery and commercial trucks.

Production, pricing, and margin dynamics

• High vehicle prices and lower volumes may require future price adjustments; stable production is key for efficiency.

• Improved plant efficiency is emerging as production stabilizes post-pandemic, supporting margin recovery.

• Lower EV sales have led to reduced capital spending and improved free cash flow, with cost flexibility offsetting margin impacts.

• Contribution margins for EV and ICE products are similar long-term, though near-term EV margins can be lower depending on mix.