General Motors Company (GM) Earnings Call Transcript & Summary

[Presentation] Well, this is truly a monumental night for Cadillac and General Motors. Thanks to everyone, especially the team who delivered LYRIQ tonight, and all of our employees watching right now. We are live tonight from GM historic Design Dome, a place that, for decades, has borne witness to many iconic vehicle designs, and kept our secrets hidden until the right moment. Tonight, LYRIQ joins that list of vehicles, and the time is right to show the world. The LYRIQ is the first Ultium-powered vehicle we've shown publicly. So we've made some history right here tonight. It pairs our next-generation battery technology with bold design that advances the storied Cadillac brand even further. Advanced technology and gorgeous design had been the cornerstones of Cadillac for more than a century. And tonight, LYRIQ marks the beginning of a transformation that will shift the Cadillac portfolio to electric over the next decade. And it cements Cadillac's role as technology spearhead for General Motors, leading the way not only in electrification, but also in connectivity and automated driving. The key enabler is really the Ultium battery, paired with the all-new architecture engineered specifically for EVs. The flexibility of our approach allows us to drive high volumes in multiple segments for multiple brands. But tonight is an exciting night for all of us at GM, and we look forward to telling you more about LYRIQ. So Mike?

Thank you, Mark. Good evening, everyone. It is an honor to be here in this room, Mark, with you, and our colleagues. We want to welcome all of you for joining tonight. How this is going to work? Let me lay the groundwork a little bit. We're going to take questions from you online. And then I'm going to direct those questions to some of our experts in the room. We have experts here from Cadillac and leadership. We have experts from design and, of course, from engineering. So with that, we are going to get started. Mark, while your microphone is still hot and live we're going to go right back to you, if you don't mind, with the first question. The first question comes from Shanghai, China. Why is Cadillac going electric now, Mark?

Well, Mike, Cadillac, like the rest of GM, is committed to deliver an all-electric feature with 0 emissions. Advancements in battery technology and increased availability of public charging infrastructure have made it easier than ever to own an EV, and we are working to make it even easier. GM has more than 25 years of EV production experience. But beyond engineering and manufacturing expertise, we also learn in real-time from our customers, charging habits where, when and how often, as well as average commutes and other information. We use all these data when developing the next-generation of Cadillac EVs to make sure we nail the customer experience and make it as seamless as possible. But Steve, what do you think?

Well, thanks, Mark. When you reflect on it and everything that you just said, my conclusion is it's time to put the hammer down. All these elements are coming together. We have a huge opportunity to take advantage of the convergence of all those things that you mentioned, which maybe is a couple of years out, but it also feels like that's all approaching us very fast. So at Cadillac, we see a great opportunity for EVs in the luxury market. Customers in this segment tend to have a greater interest, acceptance of technologies, but the technologies need to be relevant and to make lives better. Mike?

Thanks, Steve. Next question is for Jamie Brewer, our Chief Engineer on LYRIQ. Jamie, Mark had mentioned the Ultium battery early in his opening. We've heard a lot about it leading up to this event tonight. What opportunities did the Ultium battery play for you and your engineering team when you were developing the LYRIQ?

Well, thanks for the question, Mike. The Ultium battery system, because it's a brand-new system that we've just been developing for the -- our next-generation of EVs, it's a modular system. So the opportunity to mix and match propulsion combinations, drive units with different amount of battery modules to get different range and performance options has been incredible. The other overall benefit of the Ultium system is because we developed it at the same time that we developed the vehicle architecture. We've been able to design the Ultium battery system to actually be an integral part of the vehicle structure. So we're taking advantage of the battery and we're leveraging it to get better ride, better handling, better vehicle dynamics and better crash performance as well. Thanks, Mike.

Great. Thanks. The next question is going to go to Melissa Grady. It comes from Toronto, Canada. Melissa, engineering an electric car is one thing. But the challenge of marketing it, that seems like an -- it's an all-new opportunity for Cadillac. How do you plan on marketing this vehicle?

Thanks, Mike. When we look at how we're going to market this vehicle, and Mark talked about it, this is the future of Cadillac. This is our part of the GM 0-0-0 vision. So when we look at this, it's really how we completely reimagine the entire customer experience, all the way from any kind of shopping through to purchase, all the way through ownership. So if we think about the mobile app, which is already really functional and great, we're completely reimagining how that works. When we look at ranging anxiety that customers have, how are we solving that through the charging network? What is the dealership experience like? And how do we really make that not only seamless and frictionless but really delightful. And as we're trying to delight those customers, that goes not only from the experience, but all the way through to the product when we look at this beautiful car that we have. Mark was talking a little bit about autonomous driving, when we look at Super Cruise and the dual-plane AR HUD. The screen, the 33-inch screen that is so beautiful, I think. This car, it's really about our future. It's not about a marketing campaign, it's not a marketing stunt that we have, it's really about how do we reimagine the entire future and the entire experience with Cadillac.

Great. Thank you, Melissa. Next question we'll go to Mike Simcoe from Design. Mike, this is interesting. I think you and I had this discussion actually maybe as early as last night. Because the Ultium battery offers such flexibility, you could have really changed the design language of the Cadillac LYRIQ. However, it kind of has that familiar feel of an SUV, the proportions feel like an SUV. Why did you make that decision? And why didn't you make a radical change when you had the opportunity?

Okay, Mike. Thanks. It is a good question. We do get asked this quite a lot related to EV architectures because the EV architecture does give us choice and allows us flexibility. Now our customers are turned on by, I guess, a premium luxury proportion, and premium luxury proportion is, dash to axle, is a sharp profile. I defy anyone to call the LYRIQ a traditional SUV in form. This is a really, really cool vehicle. The designers got really turned on doing it. And the customers will see that. So as I said, a sharp profile, long dash-to-axle, long wheel base, what's not like -- not to like. I mean it's -- yes, I'm lost for words. I really can't answer that one any better. It's not a traditional SUV. It doesn't come across that way. Our customers are turned on by premium luxury, and this vehicle exudes it.

Great. Well, I'm standing in the home of GM design, and I think I've just insulted the design team, so I apologize. I might not make it home this evening. Ken Morris is with us. Ken leads our electrification area of the business, and he's got the next question. It comes from Seoul, Korea. Ken, what is the background of our relationship as a company with LG Chem? And what benefits does Cadillac get from that relationship?

That's a super important relationship. It's bringing together 2 companies that are bringing the best that we can do and the expertise of both companies so that we're able to do a very important task for Cadillac and for, really, General Motors as a whole, and that is to bring battery costs down as far as we possibly can. So General Motors brings 100 years of manufacturing leadership and supply chain understanding to the forefront. And LG Chem brings the chemical know-how and the battery chemistry background, and we're working together and we're helping each other improve, improve, improve. And also, we've -- with this partnership, we've actually built a battery plant -- or in the process of building a battery plant in Lordstown, Ohio, and that's going to allow us to make the manufacturing side of it as lean and efficient as possible.

Great. We've got a question actually coming in from a customer. It's for Steve Carlisle. Steve, how is Cadillac going to separate themselves from other luxury automotive brands that will also be coming in to the EV market here in the near future?

Well, as this is a customer, this is the hard sell time, right, Mike?

Go for it. That's what we call it.

So I think LYRIQ is -- it's a terrific example of the whole being greater than the sum of the parts. And we have some terrific parts to work with. And what I mean by that is others have already talked about the Ultium battery system. We've talked about -- Michael just described the design, which I find is compelling and captivating. Super Cruise that we have with this car, the displays that we have in the car, the AR HUD. So all that really comes together in a truly compelling proposition that I just don't see out there. And if you think about, as others have talked about, the experience that's gone into that to get us to this point, it's really unmatched in the industry. So you put all those parts together and the whole just takes it completely beyond. And then put in the context of this customer experience that Melissa described. So I think when you add all that up, each independent element of it is really impressive. But when you look at it in its totality, I think that's what will set us apart truly from our competitors.

Great. Thank you. Andrew Smith from Design, the -- when we start a project like this, I know your team sits down and receives a design brief. We've got a question actually from Paris, France, asking, what was the design brief for LYRIQ like? What did you tell to your team as you sat down and started to sketch first interiors and exteriors of the car?

Okay. Well, thanks, Mike. I guess in the simplest terms that I could put, rather than asking the team to develop a new EV, what we really did was give them the opportunity to develop an all-new Cadillac. So what we wanted to do is a clean sheet approach, where will we take Cadillac in the future? Where will we take the styling of the vehicle? Where will we take the detailing of the vehicle? And frankly, where will we take the portfolio as we frame a whole new future for Cadillac? So really, it was a very exciting opportunity for the team. I think you can see their enthusiasm in the product. But at the same time, we've tried to hold some of the heritage of the brand. And you'll see that in some of the detailing like the way that we've executed the crystal crest or some of the details on the interior. And really just the general enthusiasm for the brand as we think about the luxury customers and what they're looking for. So that's kind of the brief. Thanks.

On the way in, Mark, I saw the charging port of the LYRIQ hidden behind the door on the panel, which is awesome. We've got a question from a customer in San Francisco who wants to know, will General Motors build out its own charging network like some of our competitors have done?

Yes. That's a great question, Mike. As you might know or have seen in the last week here, we announced that we're entering a partnership with EVgo, which is a really compelling DC fast charge network. And we're actually tripling the size of EVgo's current network, which that's not the end of it. We will seed it. We will fund the 2,700 with EVgo, and we will look for additional capital and investment into this network that's ubiquitous. It really is for all-electric vehicles. So it's not just General Motor's cars, but EVs for everyone. And so we will continue that journey until we have an infrastructure and a charge convenience for everybody who wants to have an electric vehicle, charge it fast and do it at a convenient spot, whether it'd be a grocery store, your work, on a trip. Whatever that may be, it will give you the freedom to still experience transportation and the passion behind vehicles like the LYRIQ to be able to really enjoy it. And a lot of people haven't really driven EVs quite yet. But I think after you drive something like the LYRIQ with the Ultium battery, and Jamie described this a little bit, but we have all the elements on a purpose-built EV platform to create incredible excitement, refinement, elegance and finally, just happiness. And that's what we're trying to do, and that's what we're doing with this car.

All right. I think it comes from that instant torque?

Absolutely. Absolutely. You can do anything you want with an EV in terms of steering torque, center of gravity, all of it.

Because of the battery placement?

That's right.

Michael Simcoe, let me try to make amends. Another question for you, a lot of interest in design tonight, as usual. Will Lyriq's design element be consistent among future Cadillac EVs?

Thanks, Mike. Yes. The LYRIQ sets a benchmark now for where Cadillac's start and design has to continue from here. So all future Cadillacs, Cadillac EVs, particularly, will have the character and some of the detailed features that exist inside the LYRIQ. Obviously, proportion will be different as we create the vehicles that fill out the portfolio, our EV portfolio. But the crispness, the premium proportion, the shear surfacing, the technicality of the face that the -- I guess, the novel execution of the vertical signature in the front and the rear of the vehicle. I mean the headlamps, in fact, the vertical signature is the headline these days. That's the level of technicality in the vehicle. And when you see the rear of the vehicle, it's like no Cadillac you've seen before, and it will be absolutely recognizable on the road. So it would be a sin for us not to take this as a starting point and then pull it through the rest of the portfolio as we move forward. Back to you, Mike.

Well, it's stunning. Thank you to you and the team. Jamie, a big question on the minds of many EV enthusiasts and those who are considering EVS, is how long does it take for the -- to charge the LYRIQ? Could you give us a little insight on charging time?

Yes, that's a great question, Mike. From the day we started developing the LYRIQ, we knew the -- both range and charging time. In charging availability, we're going to be top of mind for any other EV adopters. What we tried to do with the LYRIQ was make sure that we're providing options to our customers. So the LYRIQ will have multiple charging opportunities and options for customers to pick them. We'll offer both a Level 1 and a Level 2 AC charging. And our Level 2 AC charging will offer up to 19 kilowatts selectable charging. We'll also offer DC fast charging with over 150 kilowatts available. So the customer will have the ability to choose where they charge, be it at home, at work, on the go and how they charge, and make the most of the time they have available to fill their battery. Thanks, Mike.

Pretty, Jamie. Thank you. Melissa, a question that we've received from a number of journalist is about the name LYRIQ? And where did that name come from? And how did you come up with that name, LYRIQ?

I love this question, Mike. Thank you. There's a few things. I think, first of all, moving into this new phase of Cadillac's future, we move from alphanumeric back to having full names. So as we started to explore what was the right name for this vehicle and moving forward, we were talking to a lot of people and IQ, when you have IQ in something, it conjures up feelings of intelligence, of boldness, of innovation. We did a lot of research on it. We talked to a lot of people, so that's how we landed there. And then when you think about -- well, first of all, if you look at this car, and it really harkens to our history, and the beautiful design. And if you think about Cadillac, having that place that's really in, like, arts and especially music, what are we going to call this car but a LYRIQ? I mean Cadillac's in more song lyric than any other vehicle, so that's how we came up with LYRIQ. Thank you, Mike.

Great. The beginning of a new history. Andrew, speaking of history, Cadillac's history of innovation and design have always had a little place of leadership. How does that influence our EV future?

Yes. Again, that's a good question. And certainly, it's something that's on the minds of the designers as we began the project. If I think about Cadillac, it was the first brand to have an electric starter. It's had a history of innovation all the way through Super Cruise. And so when we came to this vehicle, which was a clean sheet approach, it really was an opportunity to do what we've done all the way through the history of the brand, which is to artistically integrate technology into the vehicles to make the customer happy, to delight the customer. It begins, I guess, at the front. We talked about this new face, but it actually is radar transparent. It features multiple sensors behind here that are all set up for the Super Cruise system. Or we have the headlamps that Mike mentioned, which are a world first. You turn to the interior, a 33-inch screen. We've got the decor, which is on the screen behind me, which is a laser cut mirror over metal with backlighting. That's just absolutely incredible. And then hidden features throughout the interior, like the bright blue line, call it, and jewelry box draw or other features and the recent entertainment. So really, for us, this vehicle is kind of the embodiment of Cadillac in the past, but moving it very much into the future. So thanks.

Mark, I can understand why our designers are excited about LYRIQ. I can certainly understand why our engineers are excited about the EV future and then the Ultium battery pack. But customer acceptance is something that we know needs to grow. What makes you think the customer acceptance will expand and grow over the next few years?

That's a great question. A couple of years ago, when we started the journey on batteries, cell chemistry and the creation of Ultium, and then the decisions around our portfolios and what we're going to do in Cadillac first and things like Hummer. Those decisions were made because a lot of the vehicles that you see on the road today and in the past that were electric vehicles were, in some cases, very expensive, did not have the range that customers really needed. And the infrastructure, which I spoke about just a few minutes ago, was not growing the way our customers needed for adoption. At the end of the day, though, the vehicle and the product is king. And if we get the vehicle right and we have an infrastructure for charging and we have battery cell technology and scale that becomes very competitive from a pricing cost standpoint, from a value standpoint for our customers, things begin to change and they begin to change very rapidly. The driving experience, as Jamie pointed out, and Ken, the driving experience is phenomenal. You can tune a car just like -- to a personality of a customer. And you can do it with our new electrical architecture that you'll see in LYRIQ as well. The car will continually get better throughout the ownership experience. That's really important. And so when you have something like that, that continually gets better with over-the-air and different things that we can offer customers through better electrical architecture in an electric vehicle, things get very interesting, and they get very, very compelling for people. Because at the end of the day, the passion and the reflection of who you are and what you like is still present in an electric vehicle just like it is in an internal combustion engine. Those curves of what it takes to put an internal combustion engine on the road from an emissions standpoint versus the battery cost, which is going down at an incredible rate within our Ultium battery pack, we saw that a couple of years ago when we planned it and executed it. And what you're seeing here today is the first fruit from that. So that's really what we think.

That's great. Ken, Mark mentioned our pedigree and our heritage in EV design and leadership. What learnings have we taken from current or previous EVs that we have done or maybe some of our competitors have done and apply that to the LYRIQ?

It's an interesting question because, obviously, the automotive industry is the most competitive industry. One of the most competitive industries in the world. And so we have to understand what our competition is doing. So clearly, we benchmark. We do the research on that. But the most important thing for us to do with the LYRIQ as well as all of the other vehicles that we have coming in our portfolio is understanding what does our customer want? What do our current customers want? As well as what they are potential customers want? And so we've done a tremendous amount of research there. And we've defined certain elements that we have to have, for example, customers do want a full portfolio of vehicles so that if they want a pickup truck, they can get a pickup. If they want a sedan, they can get a sedan. They also have told us that 300 miles range is kind of the baseline of the amount of range that they require. They also told us that they're going to have just a slight acceptance for a higher cost but that's also told us we better plan for trying to be basically at parity with ICE vehicles, or internal combustion vehicles. And so long story short, we're trying to make sure that we're tailoring our vehicles to our customers because we have every opportunity to do that, they're brand-new platforms. We can integrate them however we want to integrate them, just like Mark said, and we can make them the best Cadillacs we've ever made.

Great. Thanks, Ken. Mark, I think the last time I was with Ken was out at Nurburgring in the fall. We're working on the C8. And we know that you also are a competitive driver and have spent some time behind the wheel on many tracks and -- how would you describe the driving dynamics of LYRIQ? How does it compare with other cars?

Well, I think Michael talked a little bit about how this is not a -- anything -- it's anything but a traditional design around some usability that you see on some of the crossovers and SUVs on the road today. I would say the driving dynamics are infinitely tailorable for the LYRIQ. And why that's important is because in the Cadillac portfolio today, we have things like Black Wings, V Series. We have Sports. We have just elegant Cadillacs that have an unbelievable balance of ride, but also handling. And I think this vehicle, and Jamie talked a little bit about it, but the low center of gravity, the 50-50 weight distribution. It sets a standard that, frankly, I'm not sure we've seen before. And you'd be familiar with some of our most advanced chassis and suspension technologies with magnetic ride and things like that. This has the bones and the basics to be able to do just about anything. And I mentioned the over-the-air capability of this as well with the new electrical architecture that we're launching right now, today. And that is very compelling because the vehicle that you drive today may not be the vehicle that you want to drive tomorrow, depending on where you're going, what you're doing or just what your win is. And that flexibility and that tailoring to a customer will all be present. And that's very exciting to me. So if there was one word that described it, I would say personal.

Great. Jamie, it sounds like we're going to the ring. Well, Jamie, tell us a little bit more. What was the most exciting part about developing the LYRIQ as an engineer?

Yes. I mean developing the -- this has probably been the most exciting project I've gotten to work on so far in my career. And in the video, you heard Crystal Wyndham say that having a blank sheet of paper is a designer's dream, having a brand-new architecture is a designer's dream. But honestly, for anyone in the automotive industry, getting to start with a blank piece of paper and design a product from the ground up, the architecture, the propulsion system, the interior, the customer interfaces. That's just -- that's something that you only get to do once or twice in your career. So having had that opportunity and getting to develop the vehicle in conjunction with the battery and the drive unit and our creative design partners, that's just been really a wonderful experience. Thanks, Mike.

Great. Thank you all. And thank you all for joining us. With that, I'm going to turn it over to Steve Carlisle for some closing remarks.

All right. Thanks, Mike. Well, thank you all for joining us live from the Design Dome tonight as we introduced the Cadillac LYRIQ. So much has changed across the globe in 2020, but our vision of a 0 emissions future has not wavered. We remain steadfast in that commitment, and our electric future is now. It's been an absolute pleasure to introduce you to the team behind LYRIQ, and to show you the first Ultium-powered vehicle to be publicly revealed. Within the next decade, Cadillac's propulsion system and supporting technologies will lay the foundation for a wide range of Cadillac EVs that will continue to redefine American luxury. For more on each first of the Cadillac LYRIQ, please go to cadillac.com. Thanks again. Good night. Good afternoon, and good morning.