Script Example for International Executive

This script was written for an International executive for a supplier summit.

• It’s good to be here with you today ... at a time when our industry is transitioning to zero-emission propulsion and in parallel gearing up to comply with the most significant changes in emissions regulations since 2010.  

• During this time, it is important to keep Navistar’s vision to accelerate the impact of sustainable mobility top of mind ...    

• But we must do so from a business-oriented perspective.  

• Only if there is a business case, total cost of ownership advantages, the shift will happen. 

• That means meeting our customers where they are today.  

• It means placing a strong focus on quality and consistency ... particularly when it comes to ramping up deliveries for both BEV and ICE powertrains. 

• We all just heard Peter talk about how important it is to have your support for our expected volume growth during the 2025 and 2026 prebuy period.  

• We also must note that 95% of our volume heading into the prebuy period will be combustion engines.   

• This is our time to get it right ...   

• And in this transitional environment, we have no other choice.  

• Getting it right is more important than ever.  

• Our customers expect and … quite frankly … they demand it.  

• Before we dive deeper into managing volumes as we enter the prebuy period, let’s talk about what exactly is driving these changes ...  

[GHG 3: What it Means]    

• In March, the U.S. Environmental Protection Agency released its final Phase 3 Greenhouse Gas Emissions Standards for vehicle model years 2027 through 2032 under the agency’s Clean Trucks Plan.  

• The rule builds on the Phase 1 and Phase 2 rulemakings, which collectively acted to reduce greenhouse emissions from heavy-duty vehicles and engines.  

• Phase 3 standards will apply to all of our products for model years 2027 through 2032.  

• For model year 2032, GHG3 will require reductions up to 40% for tractors and 60% for trucks and buses when compared with GHG2. 

• In addition to the EPA standards, there are states like California who are adopting and enacting their own zero-emissions vehicle requirements that introduce new selling and purchasing deadlines.  

• Now it might feel that 2032 is far away but in our industry, this is basically soon as not just products but also a infrastructure and business models have to transition. 

• The reality is … the development of cleaner, more sustainable solutions is here to stay. 

• While the journey to a zero-emissions future is underway … and inevitable … it is important to acknowledge that today, the adoption of zero-emissions vehicles is in its infant stage. 

• This is due to several challenges for example with infrastructure buildout, customer range expectations, and offered products.  

• The North American commercial vehicle fleet will continue to be dominated by internal combustion engines for years to come.   

• A major part of our sustainability efforts for the foreseeable future center around these products and depend on powertrain makers and all our supplier partners to provide us with quality products and components.    

• And these combustion engine powered vehicles will have to meet the nationwide EPA27 regulation from 2027. 

• To meet these regulations new performance steps and technologies have to be introduced, which come with additional cost, 

• And who has been long around this industry, it will trigger a pre-buy effect in latest 2026. 

• And we already see this, as many of the largest fleets are finalizing their plans for 2025 and beyond to meet the latest emissions-reductions mandates.  

• Industry analysts believe the new regulations will set the stage for an extensive Class 8 truck prebuy beginning in mid-2025 and early 2026.  

• We anticipate a spike in orders once 2025 order boards and production for the 2026 model year open.  

• We believe fleets will be more likely to prebuy as the market recovers and freight rates increase.  

• We also expect fleets will make prebuy decisions sooner rather than later as many are still reeling from post-pandemic supply chain disruptions and elevated equipment demand.  

• Because of all these factors, we must be ready for this growth.   

• It is on us—and you, our business partners—to provide for our customers.  

• So, at the end of the day, what does that mean?  

• It means our customers will want to procuring quality products at a expected volume growth ...  

• Reliable ... efficient ... safe ... and compliant products that will not only meet … but hopefully exceed their business needs.     

• To keep up with this demand, we will need you, our business partners to ramp up their operations as well.  

[Prebuy: Volume, Allocation]  

• By now you should have noticed, there is clearly a general thesis around today’s event ...  

• The importance of accommodating this volume growth and supporting our customers’ growing needs.  

• To be successful in that endeavor, the focus must always be on quality and supply continuity at competitive cost.   

• We will never sacrifice quality ... without quality, volume means nothing.  

• And a big challenge in the pre-buy for 2025 and 2026 will be that there is limited capacity in the industry overall.  

• “Allocation” has been a dirty word for many within our industry.   

• Fleets have vivid memories when it comes to allocation, unmet equipment demand during their time of need, and lingering supply chain constraints that impact their ability to  run their business.   

• We, too, as an OEM have also experienced challenges when it comes to how some of our supplier partners have allocated based on historical performance ...  

• Don’t forget, times have changed for Navistar ... and we are on a clear trajectory of growth.   

• We are not a standalone company anymore ...  

• As International Truck and IC Bus are fully integrated brands within the TRATON GROUP, we are becoming part of a global modular system ... and growing with us means growing with TRATON.  

• Incrementally, we are growing our market share and have executed a strategy to continue improving our operational performance and investing in our future.  

• But we cannot grow or accelerate our journey without your collaboration.   

• We must work together and keep the lines of communication open to create stability and positive results.  

[GIF work | Modularity]  

• One big change we have implemented is Group R&D and Group Industrial Functions, or GIF organizational setup.  

• This will assist in transitioning to a global TRATON modular system and increasing modularity. This will support scale of individual components and increase internal R&D efficiency.  

• Global Traton R&D was created to make us a well-oiled global organization and to ensure we use all our resources in the most efficient way possible.  

• Together, we are putting our best minds together to build products that benefit all brands.  

• Because of this, allocation of capacity is an aspect of our supplier relationships that will be crucial to achieve our goals during the prebuy period … goals that are not only ours, but the larger TRATON Group’s.  

• As I alluded to just a few minutes ago ... Navistar is in the largest growth period we have seen in years, giving us many opportunities to make a bigger mark on the industry.  

• I cannot stress enough how important it is to have capacities allocated based on this success and growth ...  

• And that this presents an opportunity for all of you to supply also to our sister brands with components and become an integral part of our quality products globally.  

• The perfect example of the work that can be done with the strength of the TRATON GROUP resources and knowledge-sharing is Navistar’s first modular-based product, the International S13 Integrated Powertrain.  

• We brought together the best of all brands to deliver a modular-based solution that provides customers around the globe with a powertrain that has improved sustainability, reliability, improved performance and quality.   

• This is a proof point of how we are collaborating across the Group and working towards modularization of our components, parts and processes.   

• This new operating model will help us to bring more products to more markets while continuing to ensure the quality and performance our customer’s demand.  

[S13, diesel products: Today’s bridge to zero emissions]  

• Coming back to internal combustion engines and our newly launched S13 integrated powertrain. 

• The S13 integrated powertrain and all our internal combustion engine offerings play a major role in our sustainability journey and the industry’s transition to zero emissions.   

• Part of our focus on sustainability means ensuring we bring the right solutions to market at the right moment for our customers ...  

• Which means … I said it once and will say it again … diesel will continue to play a prominent role in our product roadmap. 

• If you look at the last 30 years or so … diesel fuel consumption has improved by about 1% per year ... and those metrics are only improving, with advancements in internal combustion technology … significantly reducing CO2 emissions over the years.    

• The S13 is in the hands of more than 1,500 customers today and we are receiving excellent feedback:  

• Many have commended the quiet and smooth drivetrain and…  

• Customers are reporting between 5-10% fuel efficiency over current fleet vehicles.  

• This additionally is driving Navistar’s growth on top of the pre-buy in the next years. 

[Zero-emissions transition + GHG 3]  

• As I mentioned earlier … we must manage the upcoming prebuy with existing technologies before regulations will necessitate an acceleration in the ramp of adoption in zero-emissions technologies in 2028 and 2029.  

• While we are and have been discussing our vision of a zero-emission propulsion for  future for years, there is no shortage of challenges in the short term.  

• Infrastructure is far behind where customers need it to be.  

• Charging stations often take months to map out, gain required permits,  and building them.  

• Battery range is not currently ideal for all vehicle applications but is quickly improving including new use patterns.  

• Our medium duty and bus customers have shown great progress in these areas.  

• IC Bus is the school bus market share leader in both traditional diesel and EV and in Q1 2024, delivered the most electric school buses.    

• The International eMV Series is being efficiently utilized in various use cases.   

• With the introduction of the eRH, our battery-electric Class 8 regional haul, we will bring another solution to the market for local, regional, and drayage type applications.  

• The eRH is being tested with early electric vehicle adopters through the first half of 2025 as we begin production mid-2025.    

• Built on the same proven platform as the diesel-powered International RH Series, the eRH is specifically designed for optimized productivity in local and regional-haul applications due to its shorter wheelbase and light weight.  

• Our product roadmap must include various EV products for our customers, but also traditional diesel vehicles that are more efficient to ease them into this large transition.  

• All in all, we need to be prepared to deliver on the extreme volume that will be expected of us in the coming years.  

[Closing]

• As you go back to your teams, start the discussion how to manage 2025 and 26 as these years are expected to be like nothing the industry has seen before.   

• With so many moving parts coming together in the next few years, this is your opportunity to solidify your spot in our business as a reliable and vital partner for Navistar and TRATON.  

• Our focus is to constantly strive for quality and continuity with our products and services, a goal in which we rely heavily on you to help achieve.  

• We will continue to develop new products and programs, especially to manage the transition to zero-emissions and this is your chance to be part of it all.  

• Still, combustion engine powertrains will play a significant role to the future. 

•  And let me leave you with this.  

• While meeting capacity needs is important, volume without quality is useless.  

• Our customers expect nothing less than quality, and that is what we will deliver together.  

• Next, you will hear from Navistar’s EVP of Production and Logistics, Stefan Palmgren about the work that has been done across the TRATON GROUP regarding our Production & Logistics strategy.