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I'm your host, Max Patton. We're presented by EVs for All America. This week, I'm speaking with Ed Kim, chief analyst at the market research firm AutoPacific. Nearly every automotive OEM that you've heard of or probably bought a car from works with AutoPacific, including the startups like Rivian and Tesla. They have lots of competitive insights as well as lots of really good EV coverage. You may have seen Ed on CNBC now and then chiming in on American manufacturing, the car industry, and the like. I'm really looking forward to our conversation, particularly our opening to talk about software-defined vehicles and some of the trends that Ed is seeing in the automotive industry right now. We're also going to talk about the hot news with Ford's exciting new universal EV platform, which they broke some details of last week. Looks like a lot of affordable, innovative technology, and I can't way to discuss it. So without further ado, let's talk with Ed Kim. All right, Ed Kim, head of AutoPacific. Thanks so much for joining us on Directly Current. Thanks for having me. So can you give listeners a little bit of an insight into what your firm does and the kind of intelligence you guys collect on the auto industry? Yeah, absolutely. So AutoPacific is a automotive market research and consulting firm. So we do a lot of research work and consulting work, mainly to the automakers, but also to suppliers. We even have ad agency clients and all that. Yeah, basically what we're providing is a variety of different types of market research to help automakers develop the right vehicles for the right consumers and all of that. And we also do competitive intelligence, basically telling our automaker and supplier clients. What's happening competitively in the years ahead? Who's doing what? What automaker is up to what strategically? What vehicles are coming out in this segment? What are all the details that we have about that future vehicle? And then finally, we also do sales forecasting. So we figure out right down to the model level and even down to the powertrain level, what we think is going how all the various vehicle segments and powertrains are going to perform in the U.S. market in the years to come. Yeah, and that's super topical with the diversification of powertrains we're seeing. Oh, absolutely. Right. The EV revolution didn't happen as cleanly as people thought. And now EREVs and PHEVs in the U.S. market at least have some interest. And you guys have talked about that. I want to get into some of the insights about consumers and stuff later on. But first, we just got some news that's interesting. It broke in the last week since we recorded about Ford, an example of many trends we're seeing, right, Going along all in on a new kind of architecture they've teased before for the universal EV platform. And it's a lot of the stuff you guys have been writing about, things like the centralized compute systems, kind of software-defined vehicles, throwing in as many buzzwords as we want, right? But basically, Ford delivered a technical presentation about how they're engineering their next generation platform, which is notable because they canceled all of their other EV plans and they're all in on this one. What are your hot, fresh thoughts on that? Yeah, like you said, they did a hard reset on their future EV strategy, really backing away from larger EVs where the sheer cost of the batteries in larger vehicles like pickups and big SUVs can make those vehicles very cost prohibitive. Look at the various three-row electric SUVs on the market right now. These are all $60,000, $70,000 vehicles and up. And as these vehicles, as these large SUVs are primarily targeted at families, families tend to be price sensitive because raising families costs a lot of money. So they've strategically backed away from the large vehicle segments for electrification. And now they're looking to go into more affordable and more affordable segments that more people can afford to get into. Smaller vehicles mean smaller battery packs, which, of course, impacts price in a good way. It certainly makes these more affordable. The smaller you can make that battery pack. So I think what Ford is doing here, it is a very necessary reset of their EV priorities. I don't think that under the old plan, things would have gone very well for them, really. Continue to focus on big trucks and SUVs when really it's such an issue and there's limited interest in full electrification in these larger vehicle segments anyways. Yeah, and I think it's interesting, too. One of the big knocks on the F-150 Lightning, which many consumers liked, right? And all of the electric trucks, more or less, were things like towing range, where they, in some ways, as large as those vehicles were, as large as their battery packs were. it still wasn't enough energy to tow hundreds of miles. And so as efficient and as cool as their next platform looks, it seems like they're further running away from those use cases. And maybe that will take the place. I think they've said they're going to replace F-150 Lightning with some form of a extended range EV in the future. So it's interesting to see them admit that maybe, hey, lots of these midsize, smaller market truck shoppers, maybe they're actually not towing all the time, or maybe they're only carrying smaller loads. I'm actually a big fan of that F-150 Lightning. I actually think it's a really great truck. Frankly, I think it's the best F-150 they've ever made. Agreed. But in a lot of ways, we're in a situation where, you know, just simply the infrastructure, the charging infrastructure, just isn't ready for a lot of these truck-type usages. If you're towing a trailer, like you were just mentioning, and your range is cut in half and you're towing over a long distance, what does that mean? Do you have to, like, unhook your trailer every 150 miles or so just so you can recharge your truck. That's not very convenient. We have infrastructure issues too that make these kinds of larger EVs and their use cases not really matching up so well. Yeah. And it's part of a larger trend. Ford is not alone in this. I think you guys wrote recently about the trends at CES and how also Rivian is in some ways leading the charge of this kind of new architecture of vehicles. Maybe Tesla pioneered it, but Rivian showing, hey, this is not something that's exclusive to Tesla, right? We can play at this. Ford's doing it in the legacy space showing, hey, traditional manufacturers can do it. To some extent, BMW and Mercedes are also playing with this idea of saying, hey, we're going to completely rethink how we're building these vehicles to make them both cheaper, easier to update, more software-defined, quote-unquote. Just your thoughts on the recent news with R2, which is coming out from Rivian, their mainstream product, and many pretty compelling crossovers coming from premium and mainstream brands alike. How much do you think consumers should really care about and think about these newer vehicles that are built on a very different set of platforms? Certainly, I think for people who are already familiar with Teslas, maybe they're already driving one now, this isn't going to be that new to them. This is something that they've been experiencing for a while. At least in our market, these Teslas have certainly been the first real software-defined vehicles here. So there is already a good proportion of the EV customer base that's already familiar to some degree with the idea of a software-defined vehicle. And frankly, as we've talked to consumers over the years one of the critiques particularly by Tesla owners of other competitive EVs from other automakers is that they at least not until recently they not really software vehicles You buy them from the dealership and it pretty much stays that way throughout the ownership cycle. Sure, you might get an update or two over the air, maybe. Some automakers are still requiring you to bring your car into the dealer to reflash stuff. And that's so old fashioned compared to what a good portion of EV drivers have already experienced with Tesla. And of course, with Tesla being Tesla still representing the bulk of EVs on the road, what that means is that people who are EV consumers, there's a pretty high proportion of them that are already familiar with this concept. And in fact, having experienced it and lived with it, they expect it. And yeah, so this, so really as much as, as much as Ford is rightly talking about adopting all these SDV initiatives and all that, frankly, while it's necessary, it's also just plain catch up. It's what Tesla has been doing for a long time. And then thinking more globally, the various Chinese automakers have been really jumping into the SDV space as well. And all these new and innovative Chinese that have gotten so much spotlight in the last couple of years, these are all SDVs. And from a global perspective, for Ford or any other legacy automaker to be competitive with Tesla and the Chinese, and especially the Chinese who are just growing by leaps and bounds globally, yeah, this is absolutely necessary. I would dare say it's really starting to be a cost of entry in the EV space. I think this is not so much a case of, in Ford's case, it's not so much of a case of Ford innovating and doing something really awesome and new. Now, this is catch up and we have to do this in order to even be competitive. It's a cost of entry. Yeah, which is interesting, right? It is the consumers who are used to Teslas and now used to Rivians and vehicles like that. They can update their vehicles overnight. They've got the phone is key, like all of these convenience and quality of life things, adding chargers intelligently, which is like most other automakers have not figured that out yet so that you don't have to think about how you plan a trip. That's increasingly important. And on the other hand, pushing the other way, you have seen automakers who do go as extreme as Tesla are seeing some scrutiny in like Europe and China and those markets for things like door handles or too much dependence on touchscreens, not enough physical controls. And I can imagine also, and I can just imagine, I know, right, I'm thinking of some of my family members, there are people who are not Tesla drivers, maybe they're older, they're people who are used to the way their cars work and actively are opposed to that. Now, maybe they're less relevant to the market that's buying cars now, but I'm curious, what are your thoughts on that kind of other direction of both regulatory pressure and maybe the pressure from like consumers who maybe aren't ready to jump in with both the two STVs? Yes. No, and certainly there is something to that. The people who up until recently, people who now, of course, Model Y and Model 3 are such high volume sellers, but in the years leading up to that kind of massive sales success, there was obviously a lot less familiarity with SDVs. And I think that for a lot of consumers, especially a lot of more traditional consumers, that idea is kind of weird. There is still the idea that the functionality of something might change during your ownership cycle. To more early adopter type of consumers, technology enthusiasts and all that, and also just younger consumers in general, that comes very naturally. But to a lot of more traditional and particularly older customers, that can be jarring. A lot of customers, a lot of drivers become just very accustomed to the way their car works. I know that if I push this button, it's going to do this. And I like it the way it is. And don't change that. EVs and the changes that they can bring over the course of an ownership cycle, yes, there are definitely more traditional customers that probably have no interest in that and frankly don't want that. So I think going forward, we're at this point here in the U.S. where obviously the situation with EVs has run into a lot of headwinds. We're going to have traditional gasoline-powered vehicles here for quite some time to come. And so I do feel like most of the SDV stuff is probably going to continue to happen on the EV side where there are more early adopter in terms of mindset, people who are more likely to early adopters and technology acceptors compared to gasoline engine customers who will tend to be more traditional and just maybe not as comfortable with the idea of the things that software-defined vehicles can do. Yeah, that's interesting because I'm thinking of an example like Volvo, right, where their new platform for, let's say, the EX60, a new car, they've got this really high-tech new platform and incorporates many of the things we've talked about. And then they're not doing a combustion version of it. They're going to keep selling the C60 in parallel alongside it, which seems smart. It's interesting though, you and I are car nerds, right? The bones of that car are really old at this point, yet they still work, right? They work well enough, it's still for sale. It's an interesting strategy. So maybe we're going to see more bifurcation where the newer models, the newer IP for most car makers will probably be more towards SDVs, more towards EVs. And in parallel, you just do the minimum required to model year changes for your existing gas vehicles. Yeah, yeah. And I think we can't underestimate the size of that traditional market. I guess think of it this way. To a lot of people, cars are just an appliance in the same way that refrigerator, my stove, these are appliances I have in my house. And to a lot of people, a car falls under that same category. They just need it for transportation from point A to B. They don't want to have to think about it. They don't want to have to necessarily learn how to use a new feature at some point in the middle of the ownership cycle. They just want to get it in drive and go. And we can't underestimate the size of that market. Yes, while STVs are absolutely the future and smart cars are definitely the future, the dumb car, I think, is still going to be with us for some time. But I do think that because Pretty much all new cars have data pipes now, which technically make OTA updates feasible for most vehicles. We may see, even in these cars that shy away from SDV branding or labeling, I think there's still the opportunity to be able to fix bugs over the air and things like that. Maybe something in the audio system or displays weird or just some quirk or something. These are things that can potentially be fixed over the air. You don't necessarily change the functionality over there, but just make it work better. So I do think that SDVs will still be relevant in some way for this traditional customer. It'll just be a lot more behind the scenes and it won't be so much about providing something new and exciting to the customer over the ownership cycle, but rather just improving the experience. Yeah, I drive up Holstar too. And my sore point is I just recently got a NHTSA recall, which I find funny. It's about the backup camera on that car. and I think proposed remedy is actually a software update. So that just shows you where many cars are, right? Where core reliability and quality control, which have slipped admittedly to a lot of automakers, sometimes gets relegated to like aftermarket updates because that's what you need to do. And hey, if you can do it with software, it's much cheaper and better for the customers than making them take it to a dealer. Right. There is actually one last point I want to bring up about the whole SDB thing, which is that one other thing that potentially makes them perhaps not as desirable to that traditional consumer is that with SDVs, at least in their current form, there seems to be, from the consumer point of view, there has to be some acceptance of, hey, this might not work completely right out of the box. This, using an extreme example, I'm using Fisker as an example, which is, of course, gone, but I paid for a car that has adaptive cruise control, but it's not activated yet. It's going to come. Tesla Cybertruck owners until a few months ago I think did not have a lane centering system That right Yes Yes exactly I think that the idea to many consumers of getting a not fully baked car and driving away from the dealership in it is preposterous to a lot of traditional car new vehicle consumers. The early adopters are a lot more accepting of it. A lot of them may even embrace it. There'll be a lot of consumers that are uncomfortable with it. Just as a personal example, I am more on the early adopter side. In our family, we have a Genesis GV60. And over the course of the time that we've had it, it's gotten multiple updates over the air. And it has become a much, much better experience over the year and half that we've had the car. When we first got the car, though, yeah, there were weird quirks in the software that all got fixed in subsequent updates. and so there was still a little bit of a little bit of a sense of we've bought a slightly incomplete car yeah and i was okay with that because i am something of an early adopter and i know that updates are coming but there's a lot of there's a lot there are a lot of just mainstream consumers for whom that's just not okay yeah and i'll give hyundai kia credit right they've been one of the better automakers about especially in the last few model years actually enabling over the air updates Though I know four years ago, that wasn't the case for people who maybe bought an early Ionic 5. There were issues with the 12-volt system and all kinds of random things, which did need service appointments. But more and more of that can be digitized over time. And hopefully also as they get better at building the EVs and doing all the wiring and electronic systems, this stuff does work out of the box, especially as we go beyond that early adopter. And as I'm thinking about early adopters beyond the user experience and software, the powertrain stuff is interesting too. And you have an interesting report out, I think the last month, about the shift, the stereotypically partisan lean that EVs have would be that Republicans don't like them. And yet you actually guys have some data and it lines up with we also do polling here at EVs for America. That's actually a little counterintuitively not the case. You actually found Republicans were maybe more likely to have to be the people buying EVs right now. The funniest thing was we double, triple, quadruple check the data. Now, this is wrong. Like bad data. Like maybe a, maybe a row or column got switched or something. And no, cause this is not even possible. Actually it was. So yeah, we double, triple and quadruple check the data and it's like, oh, okay, no, this data is solid. And of course that left us scratching our heads wondering how is this even possible, especially considering, you know, considering that the year before, because we run this study every year, the year before it was completely the opposite. As one would typically expect, that Democratic new car shoppers were a lot more likely to an EV than a Republican shopper. When it comes down to it, and it remains to be seen if this is a longer term thing or if it was just something unique to this year or last year. Obviously, we know about all the things that Elon did last year and continues to do. And he's become a lightning rod for controversy. And he certainly lost a lot of his traditional customer base by making such a hard and extreme shift to the, not just the right, but the far right. And certainly that did serve to alienate a lot of his traditionally more liberal base. But yeah, so going into the data for this, the most recent data, we found that Republican consideration for the Tesla brand skyrocketed. And so while Democratic consideration for the brand had plummeted, Republican consideration for the brand had shot up by a lot. Yeah. And so that led to a long—and if you think about the fact that Tesla still represents the lion's share of e-sales in the U.S., I think they represent something like 40 or 44 percent. Somewhere in the 40 percent range of all EV sales last year were Teslas, despite all of the controversy. When you consider that Tesla has 40% of the EV market and now a much larger proportion of them of Tesla considerers are now Republicans, that has a significant impact on EV purchase intention overall. So it now skews more Republican, really due to the Tesla effect, which is fascinating. Yeah. It's interesting to think like the Tesla, like I grew up in the DC area. So pardon the reference here. But if you think about it, Tesla's cultural capital has gone from being in places like where you live in California and like maybe Northern Virginia. And like after Elon's actions in government last year, it very much maybe shifted more towards Florida and other like showrooms. I imagine the Tyson's corner of Tesla is not doing great right now. And yet at the At the same time, the brand has allowed this embracement of people who wouldn't have considered an EV politically palatable before. It became in some ways desensitized to them, which is really interesting. Yeah. And honestly, the faster we can get politics out of EVs and batteries, the better. Because he's absolutely right. It's just another powertrain type. And from his perspective, as well as mine, it's a better powertrain type. You know, why wouldn't we want to promote this? And why wouldn't we want more of this and across the U.S. fleet? It's just it's a better type of powertrain. It's simple as that. And it's interesting, like you said, it'll be interesting to see it as a short term shift or not, because Tesla, in many ways, seems to be flirting with not being a car company and increasingly falling out of interest in that. So it is curious to me. I also do wonder, I don't know if you have any data or any anecdotes to support this, but my theory has also been that in many ways, the EV buyers who used to be Tesla buyers who maybe do lean left, actually, this helped maybe GM and Polestar and everyone else who's not Tesla in some ways because those buyers still wanted EVs. They just were turned off by Elon's EVs. So maybe they bought from other brands. Oh, absolutely. And if you look at the sales data for 25, I believe Tesla was one of the very few automakers whose EVs lost market share. Most other EVs gained the main plates, gained market share, gained volume. 25 actually ended up being, I believe, the best-selling years for EVs yet in the U.S. 26 probably won't be that way. But, but yeah, so much of that was there. There were a lot of people. Just the fact that Tesla lost share and most of the others gained share, that pretty much illustrates it right there. Yes, there were apps. There was, there were absolutely a lot of consumers that were turned off by the things Elon was doing and, and then looked around and realized, oh my God, there's all kinds of great EVs out here. I don't, I don't have to only look at Tesla. And during that time period, last year, the year before, the companies like Hyundai, companies like GN were really amplifying the marketing and messaging for their EV products. So certainly there was a lot of awareness growth. And frankly, the legacies have come out with some really solid products. There's just a lot more choice for consumers. And of course, choice is always good. Yeah. And yeah, the products finally being more uniformly competitive is super important. And I do want to throw in this fact what I heard that like, it's not just Tesla, interestingly enough, at least according to RJ Skaring, Rivian CEO, I think he was on Kara Swisher's podcast or something a few weeks ago, he was saying that they noticed their buying demographic is almost 50 50 split Republican Democrat. Now, I don't know exactly his data source or how much he might be rounding there, but that's interesting, too. It shows that it's not just a uniquely Tesla phenomenon, that other brands who have made a distinctive identity are also just attracting shoppers who, hey, someone who wants a luxury thru-hour SUV, whether they wrote red or blue, may actually be into something, even if it's an EV, if it actually meets what they want in a product. Incidentally, so what RJ said there is completely supported by our data as well. There you go. Of course as we were studying this Tesla and Republican phenomenon of course that led us to look at some of the other brands Believe Rivian as a client of yours right Yes we definitely worked with Rivian And among Rivian considerers Rivian brand considerers we did find that Democrat split to be very close Yeah, I mean, so it's right there along with what RJ said. So yeah, and frankly, again, this is all good. Just more EBs in the hands of more consumers. As we've all known for years, once you get somebody behind the wheel of an EV, they tend to be sold very quickly. Once they own one, they really don't want to go back. Yeah, the word of mouth effect is real or just getting butts in seats, getting people to experience it. Though it isn't, I do want to, as we close, think about this narrative of 2023, 2024, even before Trump's second term started, right? There already was this narrative in mainstream media that the EV revolution went off the rails because the sales didn't grow as quickly as people wanted. They did grow. And like you said, 2025 was actually a record year. But part of that was because there was some consumer anticipation of federal tax credits ending and they did. And we saw it in quarter four where there was drop off. It wasn't catastrophic, but it was definitely noticeable in almost every automaker. And so as we think into 2026 and maybe more sustainable growth, continual modest growth, maybe more dramatic growth because the products are so good. What do you think are some trends you might like predict or see? Or do you have any kind of anecdotes of automakers? I'm thinking of Toyota with a Highlander or just automakers in general. How do you think they might be meeting this moment where we are in a essentially deregulated US environment? when it comes to environmental standards and fuel and EVs. And so we're completely in the land of the free market, very little interest from the federal government, at least, in subsidizing an EV transition. So where do you think we are for the rest of, let's say, 2026? Well, I think so. So we are forecasting a little bit of an EV market share. In 28, EVs made up about 8% of the market. And we're expecting that to dip in a little dip into the sevens. The subsidies no longer exist. So EVs are effectively a lot more expensive now. But at the same time, the automakers have made their investments in these EV programs and they got to sell these things. So we're seeing automakers do a few things. In some cases, there are price drops. The Hyundai IONIQ 5, which is really honestly one of the best EVs out there, had a massive price drop for the 26th model year, which effectively basically took what used to be the old federal tax credit and then just applied that. the MSRPs and dropped the MSRPs by, in some cases, 9,000 or more, depending on the trip. So there was a massive price drop for IONIQ 5. So there's measures like that. Other automakers are not necessarily dropping MSRPs, but effectively doing the same thing by offering massive incentives to basically make up for the fact that there are no incentives. You drive a Polestar, and I've been seeing all these just humongous offers from Polestar, $15,000 discount, Clean vehicle discount, they call it something like clean or something like that to basically make up for the fact that there's no longer a tax credit. So the automakers, I would imagine they have to be taking losses on all this. EVs are high cost vehicle programs and now they're having to resort to fire cell pricing to move them. But which leads me to the next point, which is that across many automakers and brands, there's been a lot of communication from the various brands that, hey, yes, we recognize that affordability is a big issue. We're going to start focusing a lot more on entry and mid-grade models than in the past, whereas we may have built a really high proportion of top-of-the-line trim levels. Now we're going to trim that a bit and focus more on the affordable trim levels. I think that that will apply to the EVs as well. And then finally, we've got this and next year were really supposed to be the years that we got a lot of affordable new EV product in the U.S. market. Some of them are still coming. The LEAF is already here. I just drove the CHR last week. Really great car, by the way. And we're getting more entries in that $30,000 to $40,000 space. I think that affordability is going to be key to bringing in new customers, particularly the younger consumers. Our data consistently show extremely strong. The strongest interest for EVs really coming from millennials and Gen Z. for Gen Z in particular, the interest is super high, but they're not necessarily at the incomes where they can afford the current crop of EVs. But once you start getting EVs closer to that $30,000 price point, then a lot more of these younger consumers can afford it. So I think affordability is going to be a big key to resuming EV growth as far. And then, and I think the role of existing EV customers, EV owners is going to be crucial because they're going to be needed to, they've already gone down the EV road. They're convinced by large, once they go that way, they're not going back to gas. And these customers typically bought their vehicles when there was a tax credit. You can't shock them with price too much when it's time to renew their leases or buy another one or whatever. The automakers will need to be very cognizant of cost, both for that existing EV customer, as well as conquesting new ones. For sure. And in some ways in technology alone, I'm thinking of someone getting out of like a 2017 Model 3 into some of the newer stuff you mentioned, like an Ioniq 5. I mean, those cars charge quicker. In many cases, they're more efficient. So there has been in some ways almost an obsolescence of the earlier EVs, which has not helped the use market for those EVs. But it does show you how quickly the iteration is happening. And if I had to put a crude bow on many of the points you made, I think it sums up into sustainability maybe. for the not sustainability in the like tree hugging polar bear way, but in the like balance sheet way for these automakers, the fire sales might work right now. But I imagine if you're Hyundai for Kia, if you're at Stellantis, if you're at GM, you were thinking, okay, how do we make a platform that is that saves us a bunch of money? How do we do good casting? All of the things we talked about at the beginning of the episode, you have to be thinking that, right? Because on the long term, they just need to make these things cheaper. But it is exciting to see the technology march along and it's exciting to see the market walk with its own two feet now. We are in some ways in uncharted territory, but as you said, we're seeing so many good EVs come out now to the extent that I would say the Bolt is on sale for a limited time. I like the Chevy Bolt, no fault the GM, but it's almost if anything outclassed because you have the Nissan Leaf and this newer IP, and those vehicles are really good, or the CHR that you drove. It just shows you that the bar is really being raised, and I think that's important, And not only for those early adopters who are upgrading, but yeah, for the new people, Republicans or not, we want to get into EVs. So that's great news. Absolutely. Thanks for coming on, Ed. I know we kept you over. Any other more last thoughts or things you want to throw in? None at the top of my head. I feel like I just let my mouth loose and feel like maybe said too much. I don't know. All good. The process worked. Well, thank you for coming on. Thank you so much for having me. That's a wrap for now on Directly Current. Thank you so much for listening. And thanks to Ed for his time. We really love the folks at AutoPacific. I also have to preview some very exciting episodes we have coming in a bit of a scattered schedule over the next few months. We're going to be looking inside the automotive industry later in 2026 and how affordability, new product, charging, and all kinds of good stuff continues to be happening. I can't wait to share those episodes with you. You can stay tuned to Directly Current by staying subscribed in your podcast app of Joyce, or following us on YouTube. You can also, in the meantime, check out all the work we do at evsforallamerica.org. These links are in the description, by the way. We have lots of polling, news, great stuff coming out of there. And also, see us at EVCS in Las Vegas coming up next month. That is this March. If you haven't registered yet, I believe you still can. There's still tickets available. You can see myself, Mike Murphy, the whole team. It's going to be a lot of fun. Can't wait to see you there if you show up in Vegas. And otherwise, I'll see you on the next next episode of Directly Current.