GM - Earnings call transcript Q2 2022 | General Motors Company

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Operator

Good morning and welcome to the General Motors Company Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded, Tuesday, July 26, 2022. I would now like to turn the conference over to Ashish Kohli, GM’s Vice President of Investor Relations.

Ashish Kohli

Thanks Brad. Good morning, everyone and thank you for joining us as we review GM’s financial results for the second quarter of 2022.

were Investor today Relations materials on are call GM the website. conference issued and earlier available Our

We are also broadcasting this call via webcast.

is Executive Q&A the CFO; will also Joining Paul portion and Kyle CEO of today Mary joining of Chair Financial; GM’s us Cruise, CEO and of Jacobson, GM GM’s Berce, us Vice call. Dan and be Vogt, President President and Barra, CEO; for the

to of Before on direct presentation. I we like your statements our page would the And with of governed the to content happy that, first be I over call by our to the language. attention The forward-looking will am begin, call turn Mary. to this

Mary Barra

good Thanks, the Thanks today. morning, joining for everyone. Ashish and call

other second billion EBIT-adjusted we materials, GM As which seen quarter, shared you with have delivered in on of and in the the in release our line is X. update July $X.X press

our of Overall, billion. some track guidance, a presents and are and led XX% also GMC continues pickup to sales in XX%, challenges year dynamic market below GM. U.S. the by and which supplies helped in us the optimal. line XXXX truck remain both $XX year-over-year is improve and to expectations with extend industry on and The Silverado Sierra leadership, our well XXXX. production the full short-term wholesales we billion that total challenges EBIT-adjusted to our deliver to and in strongest our year. opportunities includes in This unique Chevrolet are $XX and for This has the where full-size for track demand on GM increase truly We despite is between

XXXX wide margin. to by lead in We continue a

truck days The market first to in strong at supply up share has due plants mid-teens in low retail percentage our near as even half extremely our points continued is we has capacity, of been ground terms to than XX full inventory the full-size the operate days. GM the pickups fact, our stock In XX%. demand. for But X on more remained for in

below we The full-size They right are we why explain are all it’s to chain our there indications ready issues. couldn’t the they and building remain SUVs, in For even for XX. customers have been trucks helps though ship supply everything facts away to buy. June This due continued waiting are vehicles.

steps strong, are economy there While including cash to we concerns why flows, and hiring to costs spending remains the needs limiting some that That’s reducing demand and proactive positions support be and about to growing are critical already growth. sure. manage taking discretionary

we addition, circumstances, scenarios, Regardless and In have forward action from when continue and necessary. to the modeled to several of we deliberate more we move if downturn a position prepared are strength. take of

credit outstanding earnings a I trade low and rating, obligation services investment-grade flow, foundation like pension it have and of in an vehicles, anyone cash We industry. position pricing. and wouldn’t our with I and strong historically our

Sachs Vogt to about Technology And fully of working was much share All to have expands. in second an launch short-term of execute commercial next expanding increase regulators and and question, Cruise continue of Francisco and our is from steps strategy with half the in as safety Goldman Kyle historic. us their in to include insulate the it operations San in Without Origin. Francisco. the their testing Cruise the driverless Cruise area, to on will and market September operation The for growth Cruise we June hours XX as will always, Conference example. San I of this AVs service Cruise fleet committed help at Bolt challenges. team’s Cruise are more

fully will and for analysts, to a an including investors driverless experience day later that opportunity also our host We ride. own event

the of Cadillac Another major deliveries highlight this LYRIQ first month. earlier was the customer

Texas batteries and California, than The to customer reservations We Chevrolet are more person. sees the to GMC from the the of best the Coast. spring and to with HUMMER in with it more early very of raw everyone Blazer Escalade I have and who is, XXX how DC going media, fleet like Chevrolet includes holders partnership is electric enthusiastic. to Pilot the when ahead that signed our Nearly its media who been anticipation the LYRIQ question LG in reservation Energy seeing than Equinox solution reveals from one pricing, customers it EV. special billion customer design, is thanks the in customers. up the with now EV building we our intervals concentration we very be control have network Cadillacs and be looking very to install Silverado with plan With Company range more our exclusive ownership Together heavy XX% also are the can’t enough stands said, EVgo, continues is with own the for to follow like facilitate highways you the charging. a and as wait And shake almost investors will stalls it’s strategy will XXXX, and build. build Pilot the are scales, U.S. as with reservations And intensifying? charger that has as is our the interstate a benefits even are up EV materials average along on. praise for new with extremely good And GM the cells are And and new will this our holders their has We This Solution. XX% affordable received trucks. XXX,XXX EV in for for of done. XX% strategy will Florida. and the says upgrade very CELESTIQ experience GM Ultium key are to market, of for ask what EV of charging think proud discounts expand Chevrolet our requesting West interstate $X says where competition reaction EV, it one we similar we universal owners at LYRIQ until to service, spot September the just it confident technology, ever enhanced to fast by the on all Cadillac SUV to X,XXX to to frequently reservation destiny I when to investing Pilot agreements have XXX travel. are XX-mile We

to launch the full plant the LYRIQ each add QX Then in per weeks plant capacity, the We from Cells are JV to of first quarter, just its up Ultium reaching the operations Ohio. plant gigawatt away will production XX% the from pent-up at in XXXX. demand. X-day GMC cells EV of Cadillac ramping to capacity XX significantly Securing HUMMER the this hour are and beat key of the

the open plant, under just And making our the work work will track third Michigan, is the a Tennessee, final topping-out beam year. installed to is XXXX. next foundation which with is that month, take is The of U.S. August opens our battery team good in last site ironworkers Lansing, and critical cell ceremony. in selecting for these begin on projected construction progress is total our the will which On cell second previous to And of in construction also underway XXX as partners plant announcing for and fully success. the the to plant, In calls, in and fourth raw about are plants binding site more cell, GM happening capacity Today, gigawatts. has supply executed the supply agreements components. towards all talked long-term agreements. had materials EV the just and secured upstream we we three steel What’s

LG first million The material tons supply who is now cathode and between X Chem, will us approximately with with XXXX. of

Chemical reached Korean XXXX operations CAM agreement POSCO with from supply to us with from also have to XXXX. We their

agreements agreement nickel, all is is units third to Livent lithium. a GM has of goal What North XXXX. means The battery materials quantities lithium, in of the multiyear America CAM capacity annual supply. in now This and X full binding our supply secure significant includes raw million with cobalt securing in supporting this

our chain localized increasingly cell forward, just will we we move as As production. localize we battery supply have

capacity $XX Day our on chain supplier a We cost critical Chemical team CAM Livent will of GM with by goal deliver precursor deliberately, up U.S. they want and because America. we milestone meet word For due that the LG XXX% lithium I through a EV agreements. focus drive hydroxide end I want billion localization strategy includes to the volume to Quebec. source of GM individual the end, in significant and at partners. risk, XX% this is revenue JV needs annual underway sustainable mitigate upside building growth team supply direct and Investor be supply And to forging which are by for and use example, help has North will relationships is for transition scalable, North certain in ones. XXXX POSCO of also to in explore existing close us the our milestone, GM to for work production further means down thank new our facility That and facility volume And think of of XXXX a I expand To the supplier deliver to the are to building to CAM thank will and their more commodities, our opportunities. the diligence hard are XX resilient. the on we even planning commitment must XXXX. and to Chem already CAM America processing this

of challenges execute adapting, are to examples, we the today’s you see to EVs. As and is innovating part can these changing rising every our meet pivot and from company to

are chance. and our we and so in thorough, being huge are collaborative why we how We to have that’s made such And confident future. nothing strides leaving

will And to So you. Paul. turn now I over it thank

Paul Jacobson

good our morning remain extremely execution am and everyone. excited QX of team’s about Mary Thanks, in and the proud I future.

the at product progress our making believe several will transition we supply drive we fronts, increase EV ramp are are Mary an and And as beginning as we future. including continuous a revenue to highlighted, all-electric chain. an that significant accelerating Cruise on battery in We of commercialization

materials Energy Department to secure and our Just facilities venture construction LLC, a fund a the battery for battery loan conditional to help the supply Michigan, joint the cell here goal in technology manufacturing Cells Tennessee cells, of of manufacture chain in North our battery Ultium $X.X and commitment Ohio, our supporting XX-XX to America. yesterday, of announced billion

the of to finance unlock with sheet also our framework, which We strategy. align ESG help balance our are us GM’s sustainable will options finalizing deals

range adjusted by EBIT adjusted, in billion this share all let’s EPS adjusted generated out billion in margin and EBIT We in $X.X driven laid $X.X Now, $X.X up adjusted, revenue, into slightly generated QX billion year-over-year pricing We strong per X.X% higher $X.XX get volume. the billion diluted the $X.X results. month. and earlier EBIT $XX.X within to billion

results chain half into North of components XXXX. affecting decision inventory impacted to by from and tactical the were in occurred than the build Our with of plans. challenges some continued without primarily The revenue second supply more certain short-term June have vehicles QX XX,XXX the buildup, July, in our causing company vehicle American retime

some full While frustrating, we into this guidance. is built of year our this uncertainty have

Some of vehicles these quick complete. to be will

to and of vehicles Adjusted to at for as retime year-over-year and free down XXXX the QX increase vehicles year-over-year in have our QX fact, already to significant all wholesaled by challenges, the X%, vehicles seen expectation to up primarily the in CapEx up QX X% flow investments we QX of built related on these year-over-year the higher about with beginning vehicles XXX% expect impacts substantially remaining $X.X of XX% company get the through cash and the billion we up these of XX,XXX in to experienced XX% and without In impact billion to XX% volume the about holding and XX%, driven up improvement, the year. we was we inventory. QX. the wholesales to XX% guided be end Despite be QX by EV have $X.X year, certain as to to in with XX% track components by XX% quarter, continuous the lapped we year-over-year ‘XX automotive a QX the

recall margins a delivered on North our partially of EBIT-adjusted and by SUVs and the $X.X non-recurrence EBIT-adjusted at by trucks take XXXX especially growth X% but Let’s and pricing our investments North strong closer across America. In driven billion, offset and higher full-size look portfolio, down commodity QX, in $XXX America year-over-year of million of costs cost.

Our full-size more vehicles mix of by without SUVs. components, about XX% the built primarily impacted certain trucks these was XX,XXX than and being

of tight quickly As lots Mary vehicles XX with be inventory days. to mentioned, this on XXX,XXX U.S. dealer continues remains much XX to dealer units continued only turn inventory to in new at Inventory have very around and transit.

lots watch continued demonstrates half Denali inventory to this strength our $XX,XXX ATPs for last for vehicles. be on but of over continues accounting very to tight to the strong GMC, consistently over total Truck Yukon at We strong sales months dealer a the this the very demand several year. closely, the and quarters continue have nearly and for be

last year, have earlier in our provide strong a significant asking truck the are couple which including GMC Escalade we Our broader the for SUV on The made a the full-size premium investments of the years, V-Series. and this vehicles have refresh our we customers bridge options, including with future. all-electric been to trucks of the Denali these GMC over ATXX and Cadillac light-duty choices, to delivering Ultimate, range

million quarter EBIT-adjusted year-over-year driven $XXX COVID-related equity impacts. in loss their primarily million. $XXX China, by let’s to down second included GM of Now, on This $XXX delivered GMI million of International. move

QX we million, volume China impacts. saw professionally. efforts QX production results this semiconductor over to $XXX last and down EBIT-adjusted include favorable million million. driven comments in in an GM a results team $XXX $XXX made I with due to mark-to-market can’t beginning driven results was in and million few with years starting forward and Financial pricing, GMI progress mark-to-market couple was for excluding EBIT-adjusted thank These a $X.X once has A China up difficult in year-over-year first year-over-year solid portfolio. quarter, up been expenses. very over gain Corporate last the around The also corporate commodity, billion, and changes of $XXX mix, income impressive to build I team million record the enough and adjustments driven by look the year-over-year vehicle results offset the half. differences reserve to a prices partially has $XXX that by The team again primarily of equity improvement GMI by gain by equity expenses the $XXX delivered momentum. strong used logistics on levels GM and The primarily and quarter. made income them However, with personally year. China and both of to continuing navigate in June were environment, mark-to-market Financial excluding their year-over-year continues dynamic million the recover. upon

we the quarter we expenses application robotaxi which the Cruise, the to Moving would about, of $XXX delivery, personal for autonomous including consistent the we opportunities are vehicles beyond the for year. go very a of well business, excited with the believe and remainder commercial run-rate are Cruise with million expect BrightDrop.

Now, second let’s turn outlook. our half to

the Pricing estimated beginning remains helping commodity of $XX year, of We XX%. the are see costs. than we North tailwinds the guidance in XXXX to range As the in including more has held earlier achieving up metrics, $XX with billion full we confident company in the in year volume, we inventory. month, indicated range the offset vehicles EBT-adjusted of margins billion incremental strong our at America including completing and and partially

in encouraged XXXX. flow-through varies of certain We to later moderation and by the typically into We timing until to a of year the raw the impact of are see materials, meaningful lags. benefit spot earnings some and would into in but see expect not the this prices commodity

freight of moderation some premium We offsetting raw supply logistics incurring challenges, the which in chain is are costs, to including costs. the higher significantly also overcome material some of

the second $X.X our anticipated adoption as in Financial and the takes full cost charging half vehicle and expected with are trending with high-end and range growth is headwinds some some we are headwind the the somewhat. EBT including global billion credit year $X and normalize to expand also There logistics currently expectation to pricing and moderation used operations drive EV expect in actions. a still these half the year-over-year in billion to cost the investments billion year, With towards of GM puts of infrastructure. to prices expected and costs, seasonality, initiatives back with other about $X commodity impacting offset

remain the these summary, time see the continue first in in volumes. our we In a at However, in our of we and we meet growth and the appropriate costs be to year, spending commitments. ensure have seen strong to on nimble bringing will pricing prudent recovery half

executed we things have can We and control remain the we opportunities. well on on our growth focused

We are HUMMER validate GMC starting EV Cadillac to several over battery the such as LYRIQ, transitioned have vehicles pickup EV the to years. we that see manufacturing the and benefits And of investments the expertise engineering EVs. the and made our last

for start and a on laser-focused you’ve period GM. the seen of is are execution We transformative what just

in We points at portion segments will This Q&A portfolio to are call. for vehicles move the and the right And EV produce strategically of truck with concludes comments. design building at we and to we customers come to opening the great our expect. luxury, SUV an margins the price now the

Operator

Our first of comes [Operator line Citi. question from Michaeli of Itay the Instructions]

Your open is sir. line

Itay Michaeli

morning, Thanks. everyone. Good Great.

Mary Barra

morning. Good

Paul Jacobson

Good morning, Itay.

Itay Michaeli

morning. Good

Just me. two for questions

could shareholder price Just number more of should was downturn kind mix bit about of sort quantify have just of a take. question, and referenced? scenarios actions second under how Maybe and first, downturn the reasonable of cash I little I assumptions you if options a we of outcomes year. the can thinking about of think you Mary, modeling scenarios? dive hoping hoping macro earnings free can you your could we and the a you and you was expand maybe bit that kind scenarios about various And range letter, the mentioned think in you also into you half the second headwind, Paul, in logistics have I you deeper the are

Paul Jacobson

Yes.

the and So mix will I side. Itay, pieces inflation the start on

say driven is between in and the other is challenges look other the the quarter, inflation supply that half half I then of logistics and you we at we commodity about have before. about it would seen that chain saw if So, split

the that am largely we do. I when inflation as that of you think pricing the look at mix all able to was the thing in I it and about offset is – to expected quarter the excited inflation,

think the where volumes. manifested I second obviously, expecting challenges is, higher quarter were we

one dealing the which volume up outlined. about mix some in all I little we years. think year the late quarter. good of as feel the the been have last Otherwise, have the couple was really these issues a of on This we And a breaking, and the bit chip volume affected half We quarter. making with for that of it good back was

So with see I and should completed bit us keep $XX track the to to of vehicles $XX but being the truck the of billion. going inventory, a we on richer think QX of largely little out mix in it, that us side of billion a because to help that’s QX

Mary Barra

downturn actions are more perspective, a moderate and from severe. we looking at, the And would that we And we say, I’ll know a downturn take.

we’ve continue And we that might mentioned, already feel factors spending, very skill strategy some I that our it’s executing positive. the we’re but critical a many to are hires discretionary As there things unique EV to hit because doing different so right we us. positioned even now time started of reduce are with because really are

freight future. demand, – indicators still are I As that there the we’re seeing that mentioned, some but strong uncertainty for look

a in lot we’ve So preparation. done

to that If XXXX, of in cost. billion transformation took $X you we about to that in back $X.X go billion XXXX did completed XXXX we the out and

We exited systematically unprofitable reduced and regions. also have segments vehicles and

GMI improvement the brand XXXX. billion And India, Australia. done significant versus retiring Holden $X in Russia we’ve a in about and Southeast as Asia restructuring well seen in as You’ve

to finding but right not We’ve lineup, in our taking EV is the can where focus that relates fixed to driving reuse, a So reduction, on complexity we’re eliminating we go-to-market in vehicle efficiencies, continue cost. now selling it overall be very only as done then also our customer-focused. reduce of manufacturing actually lineup to ICE efficiencies lot that our a the cost we’re steps and

products in higher different demand. the steps going again, to if second the it’s believe margins Paul in steps. know would but predict hard demand now, and what would be a half our mix. And steps as the of take seeing strong we’ve What many already, what year we’re so still run But exactly for we frankly, is the right happens, and of situation lot the we the where – know a different a went depending we scenarios, We’ve me, even seeing said, direction. we’re on taken we

Itay Michaeli

for Great. all That’s detail. all helpful. Thanks that very

Operator

Thank Bank you. come will The of next from John Murphy question of America.

Your line is open.

John Murphy

just wanted think volume? I result side I improvement from like mean, going suppliers. that you Mary, would other of XX% about the on of what to I that mean from – chip morning, chain a Good I and first sort do ask this mean, a and imagine just sort volumes. given chip the for would if readiness what’s in with also supply, mix had we in improvement everybody. content unit it in on wouldn’t XX% supply

Just having concerned trying volumes chain anecdotal supply recover? time suppliers being to and as understand about working that? And the readiness, then also human stories of lots capital ultimately relined labor on or hearing capital getting about a we’re the hard

Mary Barra

depending Yes. suppliers. located, of supply think, chain team facing situation. where different circumstances that Each on supplier we have and I each group works our these And with in is a they’re

help address we out what right them is get we in costs, try to to First, the resources. and need figure we their go what do do to

right healthy, the a they can we know And we us. active people high-quality very as they’re who group and we need, have trained so hire that and work to can supply need parts because the that get it’s to chain are that they across now deliver suppliers

So stories, every I a there of lot there’s say are but work. each And anecdotal work would we just one. and ongoing

an forecast next every because semis to hard think too where before now, a now, from depending exactly inventory right right back selling lean. we make with demand, we’re there’s can we little will days the suboptimal relates We’ll opportunity into pandemic. to but And levels were year. at – go But on As do it we’re what happen field. I on right it’s think – see semiconductors, now. the we And to where an from vehicle never impact we’re we the it’s at

we strong what and are refresh hoping let’s we trucks. as demand, new now even that we full-size is So have we have remember, see

SUVs with the enhancements again, are, Our made. very that strong we

as we don’t – that if healthy inventory, that pent-up level say, normalized so for of – level still or trucks, healthy should we a more aren’t do if SUVs And get – have and crossovers, even to have to lean we but very if demand work get I full-size some to level a a midsized of inventory.

place of to more three XXXX frame ability leverage our So And chips vehicles that’s and frankly, most will need that needed even technology and we we’re we semiconductors. what the we’re more that. segments And strategy that focused in for we move as on. stability, to have we much in to are in more transfer That’s putting to resilience continue the the to give across put do that us semis time the semis more families demand. why vehicles,

John Murphy

X% and delta XX%, follow-up a on there’s growing I’m up the content I to guess, and very roughly? get a understand. about – improvement XX% to to content? maybe more just you to just it, trying need succinctly chip a supply or in XX% should there’s a then would Mary, I to I volume mean, question of that I mean, like be there is to sort of shortage, the mix. XX% a we on content thinking like mean, X% of there’s mix and question

Mary Barra

we sedan. Full-size use it I lot semiconductors of utilities what semiconductors. know so A vehicle more instance, on on segments. use all mean, power of the trucks on much the do depends it than vehicle, how technology features. John, a for depends Cruise or more

would just say will not is sure. vehicles, make it’s hard what more, what that So XX% XX% you I But swag it’s that’s – if get to really a a of be. for more

John Murphy

mild unit sorry, think scenario a you certainly my When volumes When the for globally. and how value guys kind recession mean, mild this and mean, modeling and level been severe, sure. follow-up. I autos U.S. months downside and Okay. said least X recession I in? really have where are there’s been are of I’m for to volume your in from for planning, you Because you the about much of kind at year you’ve downside significant believe traveling we severe just in hard it’s last

Paul Jacobson

John, it’s Paul.

look we volume it at pricing. as about think question I that, more and less question becomes a about a

what that we’ve same I been ever do a gone to lot do low economic with seeing. stimulate volumes don’t we’re has to circumstance a seen. unique into SARs that rather because think production. you But So It’s have as the we’ve the of noise as

I some mid-term in least type in and that with components. of certain of at vehicles pent-up that us took gives built demand confidence to continue think position that’s near-term, take led the the the the without the produce to to these vehicles we

to strong for data think continues seeing to on rise I more demand comes really So that it our products. to down on And all the give the pricing the consumer we’re side.

John Murphy

much, very guys. thanks Okay,

Mary Barra

Thanks, John.

Operator

Wolfe Lache question next Rod Research. The from comes of

Your line is sir. open,

Rod Lache

everybody. Hi,

very like question, XX,XXX America, it they that the looks on now, And depends recover. So half, unit American by range inventories until what back said, do been feels as demand sales recover could supply. on days. you the just North the constrained you out so obviously, easily are. units pretty but XXX,XXX strong. XX have XXX,XXX, And if It in maybe could in to clear XX, North they John’s extra But still sales still

you past last need in the are years seen you your the adjustments from X make to of do given XX just changes inventory sort to some kind or that throttle we’ve that over more or the comment, think magnitude Paul, production Just to of range? keep inclined of to of address affordability XX-day vehicles may you order in

Paul Jacobson

question. fair morning, a It’s Rod. Yes, good

levels, what talked to in has bit It’s lots, the about, the is have slower overwhelming I when think And the we’ve of logistics majority the I actually you sit transit. little than the they at look normal. on not now, different the getting in inventory others think as vehicles as seen right very of the is inventory dealer than which past. dealers been a

they’re dealers, to I as continuing So think getting the fast. to very vehicles are turn

are the is spend closely. thinking one once That’s the that the come. that the points We watching I about data most turn time times of key probably vehicles

that has robust. I been demand So in products. think environment good, And the I think very very right for pricing we’re now our demonstrates it the

fund it So and the to the flow monitor flow we’ve continue to critical the to running our got we’ve is journey business cash continue that and to cash got EV for transformation. in help watch because that

Rod Lache

a And made on color insulate can agreements the a what forward to feedstocks? you on deals, profitability. these just going here. of about us you Okay, prospects Have been volatility just feedstocks, commitments bit these on struck maybe on battery give EV these switching you just some just tells bit of thanks. gears, yourselves since binding, little as from color you’ve are binding any that you able for And they pricing

Paul Jacobson

Yes.

one, talked commodities, So to these take approach things that fixed take Number Rod, some would we’ll pricing, take say to I portfolio discounted meaning we’ll pricing, pricing. some two taking that. index we’ve about we’ll a some

relates to just partnerships. say two, we’re the flexible willing suppliers. it aren’t that just doing I chain. looking long-term and prepay We’re helping invest way we’re about efficiencies and on suppliers. their supply focused These to be that operations And very entire would to give as say, on within it material. creating our It’s a is volume Those and focused this me expand the producers of in contracts

the out suppliers these of of today the mutual I what represent, of for agreements these is partnerships terms best interest in the and think, there So creating ourselves. best our

Rod Lache

Okay, thank you.

Operator

The Spak RBC will from come Joe Markets. of Capital question next Thank you.

line open. is Your

Joe Spak

to prior what semiconductors, does I had you if the on at wholesale fall expect Good make that ability come comments you the all because does your wondering, some at wondering thanks all Thanks. this for those but availability but where given can XX% I’m XX,XXX like range before am to still just in that – of up, if semiconductor impact on for year? the to Paul, morning, you that how color you XX% thought impacts those especially everyone. issues, – some on it you like issue like plus you units think like have you the just back,

Paul Jacobson

Yes.

in and see we’ve as gives chain comfort see the And before, team together to on talked that in on seemed that would first based of remember we what year-over-year how been this. we have that about with us we lower I were get talk the horizon Joe, XX% So we while supply what about the somewhat out weekly goal. the us challenged can third XX% the with year say And to half, uniquely. last Malaysia. increases impact That quarter in hitting than to

those X and we get So what quarter, with us confidence. as through that’s a able that’s completing month in we’re hitting given as terms the and has already both been And vehicles. team production of do, confidence where more to of numbers essentially the those well lot

that but what quarter concern sometimes happen, unfortunate we it that manage based because got quarter end we’ve no will we able result projections. to the that it the to horizon, But that time happened on things of feel was about It tactically. quarter have within this mitigated to at crosses good that So of yet. that’s is and to indicated, forward as X-month our sort do X end. be the But

Joe Spak

the ramps you’ll EV year. how XX,XXX Can years. see us like XXX,XXX gears stuck you this then because do side, the or I’m to EVs your this idea X starting are give to Okay. next coming to cells the And It over so an Ultium of month. that production glad looks switching you maybe

And a venture versus think I’m next like of So much ramp be it, supplied you third that joint that, how let’s will significant call year. parties? XXX,XXX do by or curious so,

Mary Barra

in said from up. away we will my venture It coming plant LYRIQ products And starting the have, that weeks we’re remarks, HUMMER. joint both really cells need the to the grow. the existing and the I as ramp from plant Well, we Ohio

and bulk So to because increase volume start that then in the add much QX of clearly, the plant more next year. through rapid of

So – capacity. full be at and we’ll

can you at with of the XX% guidance by and look between then. gave So math quarter the and it do almost we now

to And XXX,XXX. so achieve we to get the very the helping plan is plan significant us have in that

Paul Jacobson

where too look I think, XXXX, now. that million we Joe, if getting are pretty right ramp is, to consistent to you X linearly just from And

far in this think this how and is in plant ‘XX we plant I so of cell shows are on ‘XX, X on. So cell ahead coming because X

why very this trajectory so up right methodical the excited really we’re thoughtful, of you see out that ramping approach a we we now. pointed I So sit But where think volume. about as of

Joe Spak

Okay, thank you.

Operator

Jonas come from will Adam question next Stanley. The you. of Morgan Thank

Your line is open.

Adam Jonas

cost your of to profitability Thanks, inflationary everybody. about and metals wanted on I the assumptions long-term follow-up business. question Rod’s environment on your EV

Given the view how your or long-term business? your profitability of changed returns has how your the and market has control changed much to destiny, efforts EV upstream on materials and battery that notwithstanding specifically, mitigate

Mary Barra

the we’re we So margins as Adam, through decade. still this overall, go targeting XX%

commodities. we some course, as knows broadly efficiencies. this. continuing What Of We impact solve take they’ll cost an all right EV drive we’re what exactly technology do. out. the but to That’s they’re problems. where we’re to materials of have no years doing We X go find be We X, see the increases X, across engineers in is when through only going solutions. not now, you But one

people We’re chemistry several manufacturing but Wallace this working with we internally other different in LG, not out. it why cost fall. parts involved EV and take the have for up starting center to only battery with with of R&D That’s but the

look R&D do lot to We of scale we automotive the to a is have manufacturing we’ll working and that’s people and that, at how many technologies, struggle know battery to why these As promising consistency. operations where with have grade do companies at of that.

we’re efficiencies take to find drive from the I’m progress, goals to to that going achieve had out that to So and we as margin confident perspective. continue a cost we’re we ways going

Adam Jonas

the protect the I Financial the or facing either environment Walmart’s just the the on GM are in environment? Financial? deteriorating to follow-up GM you consumer, Can or provisioning gives changes you you into unique help given deteriorating overnight, making consumer. in what And health warning other the aspects see Mary. Thanks, a originations Obviously, of of really insight business

Dan Berce

I’ll Yes. Adam, that. Dan take this is Berce.

decisions views, make constantly What these strong new a GM And based term, credit portfolio, payment structure, income we performance views. take in tier, So on our many credit. approach other seeing our granular to portfolio we credit we’re analyzing and a tier. whether on now product, to car structure extremely tighten regardless LTV seeing meaning by regular really, ease we’re of or to basis,

On – new it’s look would more that we’re that a segments majority places portfolio, car of very, portfolio the bit vast the the that used there’s we and concerned But about side, probably performing to is our and tighten. very well.

So really this at view to point. no tighten there

along. levels, reserve expecting as credit all far we’ve As normalization been

the we’ve particular, And is to methodology, view a we a that provisioning apply in economic – to going taken environment so reserves quarter, CECL forward. our overlay have our built normalization this already. and In economic we under weaker into

economic increase reserves that to our So overlay would took we that serve this quarter.

Adam Jonas

Thanks so much.

Mary Barra

Thanks, Adam.

Operator

from of question next The Brinkman Ryan JPMorgan. come will

line open. Your is

Ryan Brinkman

improved which question. to might pricing? the the and latest my probably from taking EBIT that billion, I the pricing update year inventory record to guide on what chip normalizes? for likely guess, thanks Maybe you’re had be a to terms issues maybe given billion difference $XX availability. less I confidence far able than in as with chips pricing continued to second, the as wholesale did to gives Are examples to to of back secure softens for And to the relates consensus reducing full sequential to in you very above to being of hold of regard in? ironically the could inventory continuing to economy your ramp you to sustainability the see to half do about those tracking industry industry? $XX full hold deliveries to or above-consensus first maybe any will the $XX able Are or the thinking what what pricing Hi, of for billion. make conditions regarding support select is skepticism outside you If chips? in in chip guidance? the economic the you the by visibility in in cooling half the have even order XX% the a year year, you in that there point of availability maybe portfolio XX% yet elsewhere for How are availability demand Could chip auto vehicles has the growth maybe with help pricing and

Paul Jacobson

Thanks, Yes. Ryan.

of So would seen day, we’ve demand remains all on at to data strong. the end date the I that the say vehicle pricing and that

importantly, turn production see to alluded we inventories has with date, quarters changed data but fact GM hasn’t earlier, what really to as the on in that even increased we’ve six I gone dealers the up. ground think from I Dan’s about at Financial times while also production

we work that. but good we pocket of able where to we we is fully to, but a the be we vehicles completing build respond, So confidence yet. is that through We’ll to those about had we – big those. feel still hasn’t met demand sits, think that there meet that And to without and been continue why need which if them

our was we a As for XXXX. didn’t the relates the It we of chip about to confidence chips, supply it it again, had level mean gave as over. guidance that

expectations the see In we largely in and fact, some our we’d we highlighted that but year. line challenges with challenges, still for have seen been

able longer been last pricing we cases, some in to hasn’t more of year. couple expected the even than for or months being And going So that first X been in resilient into deteriorated confidence our the has in that months anything the has there year hit full goal.

$XX So us $XX remain the that’s to kind and billion giving we it. guide, on what’s to that continue of billion confidence focused around

Ryan Brinkman

year commence quick think that so? as the just about How you revenue, think that, maybe seem should pick there we Maybe losses way costs? Okay, operations? operations, more the the trajectory a you EBIT, tracking or more maybe Or people thanks. fixed commercial Cruise follow-up pick up you ground. the there of the generate amortize little losses for do some have the to up operations, a EBIT as on begin can you the over launch launch bit more you What’s on to about next as to some

Mary Barra

going with because advantage. first-mover have plans and sure to a next, scale and to we we there what this that and I’ll very to available do the rides about are Cruise’s for all year the they let have are having make of we Francisco resources business of comment, for first we With the XX% would ability excited in charge we the are confident demonstrating say, Kyle off, area think but is to scale. quickly that opportunities I San that

I that so we you and strengths available Paul, have investment. have have support one amortization is and that Cruise know, we plan strategy. on do a don’t the the work the of the together of sure if GM and growth specifics And the a to rapid any make funding

Paul Jacobson

Yes.

change the end we think at expected continuing cash or compensation built into the the headcount, expense, increase than day, at with also have given perform that provided. liquidity of the all in in what seen have we is I our but That’s the forward. a The for option it’s faster year. both cost it’s expectation So, to we going

really Cruise any surprises So, forward. for going been there haven’t

Mary Barra

I to Cruise. don’t have want you you related if add know, just overall Kyle, to that anything And

Kyle Vogt

Thanks, go into differentiated sure. opportunity When Yes where you can highly don’t casually Mary. a $X the have you to weigh a and technology you that. have got trillion after market product,

position is a You coming that you revenue think attack early competitive this aggressively commercialization. and Cruise, in our right market, it I position now cash right seeing do for just have the first And results advantage. presenting given in. strong is initial We now, speak aggressively. the I think, are our we themselves. given able are to the what But And

covering Our last the first year. adds we then, we and over driverless have the world. – are since X.XX markets doing just million X.XX XX% in of over thousands ride-share of ride customer million rides, And done top November one was driverless of

up So, we exponential. rapidly. are It’s scaling very that

scale, it’s surprise. for of year think over But a initial next cash preparation expected people quite on is to spending, – catch that going we ramp so. to our that’s the certainly, by we I or but there in the do bit

Ryan Brinkman

Very you. helpful. Thank

Operator

Delaney next The Mark from Goldman come of you. question will Sachs. Thank

line open. Your is

Mark Delaney

much taking Good guys. questions. very and thank for Hi the morning you

China, the demand you are ability in seeing as is terms your one both are Shanghai can what of you still in of and but in Maybe there region. on to operate has China. on talk region constraints also reopened, the terms to ability China operate in First your

there stimulus to sustainable think some been recover. demand I you the China that’s has in think perhaps helped Do region? the that

Mary Barra

timeframe. timeframe. we some that to phase the very significant saw perspective. of EV the the an a QX our be we and open, during Shanghai, regain also And improvements in So, lot already operations and in very shutdown a started of player saw we with share When a are optimistic clearly, drop specifically we in can from restrictions June those

that’s launch of very to we foot LYRIQ plans XX% in convert the our have – shortly. production have coming by our China XXXX. than And manufacturing footprint EV We there more to

performance strong the the leadership sales Mini. Hong – that SGMW and leaders have also with We we Guang with the have

China as expecting recovery. So, might slowed a ramps. are we be It

coming are with We has of encouraged that by some put we our do China, in recovery. feel strong the lineup But we government stimulus the will in. have a

Mark Delaney

the not follow-up on visibility hour That’s for Thank think pack at you second a GM level was talk whether that question $XXX some tracking the battery mid-decade? helpful. per you materials And materials battery cost can added is the on about into structure, kilowatt still cost battery raw My be you. you now to under agreement. have raw or front your

Mary Barra

as an advantage have don’t we have operations, with lot scale. an the to we go So, well mentioned continuing LTM to the help that’s perspective. from that that and we to to sure will do $XXX that’s And be work going because take before, because we out We configuration again, below make it scaling cost hit as I well are we what by overall. efficiencies, affordability platform manufacturing can a by unique us of those need

prices in So, because material some advantage that at the the the mean they cost of we but we the the executing. we are differential a we strategy of our be I will competitors raw vehicle. are will think what to have are, looking cases, of total

Operator

will with on move Emmanuel the next Deutsche Rosner to question, We Bank.

Your line is open.

Emmanuel Rosner

much. Thank you very

or hardest us move into to risk, and as I of is for pricing the One downturn downside is we pricing things think recession. assess investors what risk vehicle the potential

framework these some willing So, And I your of wondering if downturn of you would have there. was share to been see very I scenarios. was you be of like refreshing to encouraged sort some

hours, used think you GM potential host around I years historical a think framework ago, these I you a to had few where office pricing pressure.

if think how you with you it? us Just help about could do curious

Paul Jacobson

to goals, Number the trending etcetera. the with have that. Good of through and generally I Investor two morning about going we process to planning towards things share the And are fall we we our just kind Day in Board. long-term how will are think forecast more Emmanuel, one, multiyear

that there sort is level Second, of a I level think of of a normalization, is board. the and there across recession

articulated, dictates So, of looking moderate and as severe what that. at kind Mary is

But out we we pricing, demand in world, the look figure recession, balloon. commodities, in then a where would potentially expect out of certainly we the to think that got happens air out moves some logistics, So, I to etcetera, what model lot down think as expect we have pricing. happens to when see to at to what we a would significant come I of

got are of a the decent comments it. to of of any some that have natural in on I we So, a putting no downturn. hedge we event sort But into specific that pricing think variables

Emmanuel Rosner

the year. year electric Okay. this between And like then to of thinking could important become volume I vehicles. I the one meaningful going guess one [ph] for Obviously, so, sort this of the months next to potentially growing the that goods XX as more some think XXX,XXX units produce contributor am – is next I of the the with profitability and next, the about or is goal be near-term a of

a going volume as is in sort up, next be maybe to and about of it near-term? know going it you the about long-term margin think we pretty think So, I are to factor? this with but how probably should What ramping difficult, contribution forecasting mid expecting we as year

Paul Jacobson

get think to the before, parity goal mid by decade have I EVs So, as going Emmanuel, talked to of ICE here we our about part is to late forward.

and on driver specifically battery are and key So, we to model we scale it some you But And as increase every vehicle see improvement talked of Ultium I that’s in strategy we forward. the rapid plants generally, haven’t flowing profitability I a going we going think, think with get as don’t. about EVs, I profitability up. think capacity, our

that So, we some in meaningful there am pressure, the sure not I against are. where run, it’s that short all is but

million and vehicles getting steady we ramp pretty EV production. expect improvements some should we to up year-over-year get to X the beyond, we as As

Emmanuel Rosner

you. Thank Okay. Great.

Mary Barra

Thanks Emmanuel.

Operator

from comes Chris of next question The McNally Evercore.

is line Your open.

Chris McNally

morning Good team.

a or specifically you don’t to ‘XX follow-up Ryan’s until just Just on rate comment of to maybe question is accelerate the now I right the fair also for to guess on Cruise, cars, you say shape off that EBIT September burn the want is think rides, to San are holding event? more next losses investors going materially reason the assume The absence ask more year just I ramps, the launched. as but are in Francisco I new may it are cities

the about if going we up are even that burn shape quantified, of year So, next not EBIT correctly? thinking

Mary Barra

give think I speaking then input in and at conference going Goldman Sachs Kyle are we a to conference, when forecast I the XXXX more September will And be be guidance. First, from the we there. Chris, for providing

taking as part leadership that I we and are gain So, sure plans important position we as Cruise have as fund cost such well that the way technology matures. Obviously, and the be have we a in can are make will we that as is we out a would we an say as as the well. of Origin going to spending well done share –

guidance and you September, stay XXXX. we what we guidance So, talk would for in give I give until tuned ask we is then further will as overall

Chris McNally

comments of Dubai That’s lot anything testing. you on? what the Great. just be XXXX? have about in what referenced there the made or early next. in a And I very media? a the you XXX% Arizona, guys that maybe anything you – launch in just like the is a around into remind then app again, that helpful, of Is there Kyle, can publicly comment Will may timing cities be public then Mary. Okay. us, And could know XXXX, ride-hailing may look

Kyle Vogt

Yes.

we next years. So, where that don’t to we plans want for future we when. cities give haven’t scaling very a yet our But announced up aggressive mainly obvious are everyone but and reasons, that going have we heads for

in and deployed substantial then We on approach well ride-share works San the open rides. have now that Francisco, is Francisco do an of Thousands markets. the public those attractive to to for and used app, the and the are what in app San similar able we And the members other it work taking of fares majority public. in technical have ride-share have of we charge de-risk to done to

the pretty big company fresh But in press pre-revenue and going early scaling beginning just it’s our of beginning – trajectory. step was first that’s of That’s the revenue last a a stages. that off in for essentially rapid months. that to So, coming us at the couple the from of

Chris McNally

so Thanks to forward much. Okay. September. Look

Mary Barra

Thanks Chris.

Operator

BNP The Exane. Paribas next question of come will from Picariello James

Your line is open.

James Picariello

morning guys. Good Hey.

on Just and commodities freight.

mean based on hypothetical is could today what at spot about I timing contracts, your look lag to the current thinking current and next your spot rates as rates So, P&L the there way be year baseline? of any of the like, the flow-through using exercise again, in

Paul Jacobson

say, up. lag fact were any going benefit guidance that it prices premature by I Certainly, a had you would better look it’s from commodity standpoint. James, giving XXXX, the we be as Yes. that evidenced be would to as XXXX in

on on of our two-thirds of commodities are we are index multiyear about agreements third have a So, and kind of about forward. that going sort pricing that

savings commodities bit environment now. stay is quite there. tuned to to sits a The as some So, I that. going change would are there there But certainly obviously for right say it here from

James Picariello

Savings next year. for

Okay.

Paul Jacobson

Yes.

James Picariello

any announcement was make the on first to then company the I announced thought fourth hoping an the of battery half. plant? timing sometime in color And the

there? program? the terms Thanks. what’s the any can on curious today details and billion the U.S. just the $X.X loan And government of So, timing through then you provide announced ATVM

Mary Barra

future. So, the fourth be not-too-distant in will the It the definitely year. will plant for battery this announcement be

a Obviously, of there tuned team a amount that. – stay done is tremendous on the just work. So, lot has

are So, then about terms. will approaching you let I we talk announcement And the there.

Paul Jacobson

Yes.

obviously to still need loan. on close Energy we Department So, of the that loan,

we LG Energy loan Cells to it have close it is LLC, on Solutions, GM. non-recourse so a is details will to us As it both But benefits it, Ultium more and and we it.

Beyond that, at disclose closing. more will we

James Picariello

Thanks.

Operator

next Colin Fargo. of Wells Langan The question come from will

Your open. line is

Colin Langan

mean raw engine, to material If EVs fall, possibly question. more Thanks costly now pretty cost the pretty $X,XXX opportunities probably is I a Great. my right gap. don’t this taking are for large internal costs which am I battery big than that combustion estimating offset what are increase?

particularly forward, ramp? can it margin as how the changed haven’t that and going So, your into to with spike year next gap go really, I you be material seems headwind. the a like fill big mean we pretty targets seems

Mary Barra

important would going it. of say a to to continues I piece we ramp find scale manufacturing, up, also opportunities battery as think I the team finding very of efficiencies. to take be cost cell Well, is out manufacturing

We the less little we say, of in look to can that have mid expensive can term, We a the, over and I bit that – more use improve will the we found materials. continue also cost, will opportunities purchasing. chemistries at chemistries use to longer what

out. So, we at single every look really, to Colin, cost element take

next the up. how EV, ramped do this and to the good that into and Blazer LYRIQ continuing year cost of it. are one right battery is do in the is and products now we get engineering EV, goal And number busy get we thing a there yet is to get – then everything with the it Our team interest really will But and we the SUV General Bolt perspective. are the because if or plants manufacturing the later, getting EV as the customer HUMMER, seeing we have, and these up we team Silverado whether launched one year HUMMER such the knows demand it’s strong for Equinox from out, take Motors’

Colin Langan

Okay.

in Can unusual comment kind or You lot of about on is lead times a of stable. bit this have you pricing talked preorders. environment where you a

started what that that have that Is of shrunk. have times are indicated lead seeing have the kind dealers lead of the that Is the true? normalize? to times Some you

Mary Barra

could products, we frankly, get there specific full-size be products for SUVs, in-demand our seeing these that. No. mean we is for aren’t there out. products, might the – in at seeing really to I time But change most and trucks look a still when be lead you

Colin Langan

for Thanks Alright. taking my Okay. question.

Operator

from last of Jairam Nathan Our Daiwa. comes question

open. Your line is

Jairam Nathan

for Thanks Hi. squeezing Yes. here. me in

a inventory. had just on I So, question

the like fourth. in third the to increase kind mix the How SUVs, wrong quarter Walmart and things. the XX% especially pretty inventory given XX% And seems companies look it about We of in of large building seen counterintuitive. should XXX% and of to talked XX% have we You at prices like production? gas

should much the terms we production in at mix of So, how look how volume? the

Mary Barra

Well, enough build even right now, we we SUVs. from – SUV can’t and as lower a full-size trucks full-size mentioned, mid-teens and for

SUVs. something me, strong from it’s for waiting their still carefully. very we A we these So, waiting customers very we trucks of lot them for vehicles, And we think expect watch and opportunity have, the have I Believe I them. get emails very, demand.

confident at eventually, the demand we know we June still are to to we we have the see made but that to appropriate to do normalize, with start where so to to going see level. Again, we we never a build we close level. build inventory work and then to that, were, to are And the decision back when start even where And do when don’t demand. post vehicles to strong in these

strong we building them. So, are that we we the with are that, vehicles have for in today demand confident

Jairam Nathan

Okay.

have like packs? follow-up, there of a a just understand, like are quite these EVs to And demand. it how you products And like bit – instance, what’s your for As looks some is looks you BrightDrop, plan for coming battery do a announced up. like it – allocate I to lot wanted of the of

between kind do of these resources allocate vehicles? how battery you So, the

Mary Barra

Yes.

and because So, why across cell we to demand. all see have plant we capacity. so we we plant following our whole EV we general, look have The that demand battery are right where the is year portfolio in strongest allocate up off we to going two look challenge and the excited and year are demand right our now, plant one where the strongest now three is. of – the is Ultium our that’s next get outstripping And

is And covering of just lot segments customers. demand we sure and so is we and look at a the are to the kind what across. make all of kind it key And of that allocating looking

importance to EVs getting the BrightDrop, and Silverado we going strength already strongest Equinox, in see knowing that Blazer – continue affordable EV well. the with as demand whether will that, are we seeing especially the but the So, are the it’s LYRIQ vehicles fleet and for of we to also we from the where see the do out that

out problem than to better frankly, So, it’s others. we it’s have are problem of, a working but a

Jairam Nathan

Okay.

out? Just Bolt’s plan, that put be the you end, One like, be all if of BrightDrop’s more or kind the right, would or the and making but would Silverados, be to a spread understand the let’s I at it say, would argue one spectrum, other. should that BrightDrops

Mary Barra

because is in there more we vehicles for, think the is It having will to look have remember, to out that the drive huge key as going demand be volume. EV spread portfolio I segments

So, have demand again, we as and ability to of the us market a the how packs see and common allocate flexibility cells lot that make we the as will we gives unfolds. the evaluate decisions because we

Jairam Nathan

great. Okay, Thank you.

Operator

call to over now the Mary Barra her like turn Thank for would closing comments. to you. I

Mary Barra

much. so Thank you

both is executing our in Paul and uncertain. believe well environment even I on the long-term team commitments short-term this As have discussed today, and we our that’s pretty

right have as rolling we in out the said, And right strong foundation a in EVs are segments. believe, the We I just place. we

have also vehicles, the will Chevy, getting – and performance, couldn’t on with we We with design, the that more pleased are the these we you from vehicle it see HUMMER in well. we seeing the as Cadillac, GMC every strength and across feedback across be that the that we And technology we reveal. response strength are

that get strong that one say, and that another York have in EVs. is includes we talked again, also very to the targets going City hands-on be us execute with host to will the are we that that customer their event there in about. demand, fall and investor I we business pleased as we So, we our margin plan, will, feel New will experience

vehicles the to strengths can market. you the that these So, and bring see they

calendars please but mark to more I forward before And going to if have XXth. soon, details seeing look are November then. don’t I to share We you your there for

So, all thanks good I hope and your again day. has for a questions, everybody

Operator

for Thank for call conference you That concludes joining. the today.

now may disconnect. You

General Motors (GM) 26 Jul 222022 Q2 Earnings call transcript