General Motors Company (GM) Earnings Call Transcript & Summary

Thanks, everyone, and welcome back. We're really excited to welcome our next guest, GM, and particularly their Executive Chief Engineer of Automated Driving and Executive Director of AV and EV Integration, Scott Miller, for an AV and EV discussion. So in his role as Chief Engineer, he is responsible for Super Cruise and the future automated driving programs. Additionally in his integration role, Scott works with product development, safety and vehicle performance teams to ensure timely success of the programs within GM. Prior to joining the autonomous and EV team, Scott worked in both CO2 strategy and has been Director of Energy, Mass and Aerodynamics. If that is not enough, earlier in his career, he worked on the first-gen Volt, Spark, hybrid trucks and the first alternator and starter program. So first off, Scott, thank you so much for joining.

Thanks for having me. Glad to be here.

I really just want to do a real quick background on some of the topics for some of the broader investors. Now -- so first off, remember, GM, has 2 separate programs, but related when we use the word cruise. So you have GM Cruise or their robotaxi and an AV program and then Super Cruise or the second-generation of Super Cruise to come, which is really a Level 2+ advanced ADAS program for production vehicles. Super Cruise is GM's next ADAS product -- next-gen ADAS product, which is a true hands-free system that uses HD maps, various sensors as well as the driver monitoring system. From an EV perspective, GM's Ultium battery platform was unveiled first at its Battery Day earlier this year. And it's something that we're going to discuss with Scott today about how the integration of Super Cruise and EV go hand-in-hand with something like the Bolt EUV launch in '21 and '22. So with that, Scott, I'm going to pass it over to you for a brief introduction.

Well, thanks for having me. It's -- I'm happy to be here to talk about our systems and get into what's the driver assist systems and some of the integration questions. So I'm looking forward to the discussion.

Great. So first, maybe we can open it up about the world of automated driving and advanced ADAS as you see it. All things, COVID aside, can we talk about the progress that GM has made over the last year? And you could talk about GM and both from a broader industry perspective.

Yes. It's been an interesting year to say the least, right, and it continues to be. But I think all things considered, I don't think we skipped a beat. We have a -- in our automated driving, we have a very aggressive rollout here. We're going to launch in the new Escalade and the CT5 and CT4 here in the near term, and then over the next -- between now and '23, 22 different applications. From an industry standpoint, I think automated driving is really catching on what it is and why -- and what customers value it. I think the field has grown both in numbers and capability. And that's why I think Super Cruise resonated so much as when we integrated it and developed it and created it, we targeted hands-free, which meant it had to be very good at what it did. And we had to give the people [Audio Gap] We started right out from the beginning, given it -- a very in-depth situation awareness to know how to handle the roads. We constrained it to operate on roads. We knew it operated well, and then we integrated a driver monitor, because it is a driver assist system. So the driver attention system ensures that the driver is ready to take control if needed. So that's been keeping us busy. Super Cruise is still getting better. We've expanded it up to 200,000 miles of available use in the past year, and we're going to continue to expand that. We also announced that we're releasing an enhanced version of Super Cruise, which will not only improve its capability and its availability, but it's going to add some really cool features like lane change on-demand. So we're going to have Super Cruise on all of our Cadillac models going forward. We're going to expand it to non-Cadillacs, the first banner, Bolt EUV, that you mentioned. And we're going to keep adding to its capabilities and enhancing its performance over time. Lastly, in the generational evolution of it or design of it, we've greatly reduced the cost of it. So that gives us some interesting go-to-market options with it as well.

And then, Scott, just for some of the generalists who are in the audience today, could you talk about this difference between automated driving GM's way of talking about your programs like Super Cruise or Enhanced Super Cruise for production cars versus autonomous driving, robotaxis, Level 5 and how GM sort of tackles the 2 problems separate, but obviously linked?

Well, we call Super Cruise driver assist because that's what the purpose is. It doesn't leave the driver of the responsibility or of all the duties, but it greatly reduces the driver workload and enhances the experience of commuting, so to speak. Autonomous programs basically relieve all of the drivers' responsibility. You could sit in the backseat or sleep, and the vehicle is responsible for everything between A and B. So that's a big difference. In General Motors, we have a two-pronged approach, right? For our retail customers, we're working on automated driving, and we keep growing the capability. And we'll talk about that, too, in different scenarios that it can cover different roads, it can cover -- and then with our Cruise program, Cruise AV program, that's really focused on the robotaxi and rideshare market, which allows the specific needs and the development of that system to happen as well. So we think both of these offer transformative experiences. And over time, both of those at some point will converge to not only transform the automotive experience, but really get to what we talk about when we say 0 crashes and enhanced customer safety at a level that's not seen before.

Scott, this is John Saager. Just going back to the advanced driver assistance features, can you tell us a little bit about how Super Cruise actually works? What kind of sensors or tech is needed to enable hands-free driving?

First of all, GM Super Cruise is an internal design. We've designed it. We developed it. We decided the redundancies and the sensor suite and everything else. So it's done by a world-class software team and integration experts that we have. And what it does is it really gets [ to ] 2 areas. One is the situation awareness. And so we have cameras facing forward, at C lane lines. We supplement that with a LIDAR-based map that really lets us know what should we be expecting like an off ramp or lane ending or stuff like that, so we can stick to appropriate measures. But we also then add radar such that we can measure accurately between the cameras and the radar, how vehicles are moving around us. And basically, all of that gives us very good situation awareness. Some of the early systems that were available to retail simply use cameras. And cameras, they're very good sensors, but they can sometimes -- lane lines go away. So what we do is we supplement the 2. We call it high-level fusion where we'll fuse the information of knowing what the map tells us with what the camera's telling us. We can make good decisions about is that lane line is supposed to be there and do we see it or not. And that's what helps getting to the confidence. We could tell if there's a turn up ahead that we need to slow down for to go around the curve [Audio Gap] The second thing we did is integrated our driver retention system. And it's a system where we let the driver do what the driver needs to do with keeping aware of the surroundings, checking mirror, so to speak, looking off road. But if the driver looks away too long, we gently invite them to come back. And if the driver isn't minding the tension system, then we can escalate to different levels of response. So that's a -- it's a little bit how it works. Now the other thing we do is using our map. We have GPS that we correct to a very accurate detail. And that lets us do a couple of things: Let's us know where we're at on the road as we're driving, for instance, on the map, but also lets us only engage the system where we know the system works well. That's how we geo fence it. It is the technical term to only operate where we've determined it operates very well. So that's part of it. Then there's different redundancies. We also use our surround-view camera. So Super Cruise is the only system aware that over the full speed range, you can operate hands-free. And so when you get into a stop-and-go traffic, which is frequent situation, the forward camera doesn't necessarily see the lane lines if there's a car very close to you. So we'll use our surround view cameras such that we can go from 0 to full speed. And I should say, there is a speed cap on Super Cruise that we limit it to. But for any normal customer speeds, we can operate from 0 to full speed totally hands-free.

Great. Yes. So the Bolt EUV is going to be the first non-Cadillac and the first EV with Super Cruise. So from our perspective, it looks like GM is trying to pull in customers with features they really want like Super Cruise in a car that's great for you guys in terms of meeting the regulations and lowering your footprint. So can you talk a little bit about that decision and then the cadence of the Super Cruise rollout? Can you give us a rough estimate of what you're expecting in terms of take rates and how the product might be priced?

Yes. We're currently expanding this to 22 vehicles by the end of '23. And as we continue to roll the technology out, it just brings tech to more customers across the lineup. The Bolt EV is our first non-Cadillac application. And if you think about it, it make sense. Cadillac is a technology brand. And so those types of customers were really the first adopters to something like automated driving. I think in the sense, the EV customers are a bit in that, although becoming more and more mainstream every day. So it kind of makes sense to pair Super Cruise with the Bolt EV. But we're not stopping there. We are going to introduce this in just about every one of our segments, like I said, 22 before the end of '23. That includes our full-sized pickup trucks and our full-sized SUVs, which will offer some pretty unique capabilities. And then in China, we'll have this across our entire Cadillac lineup. And then over there, we'll also expand it to both our Buick and our Chevrolet models in the coming years. So -- and the reason for this is we have surveyed our customers, and the feedback we get from them is pretty tremendous. 85% of our CT6 owners, for instance, will say that they'd -- they'll only consider a future vehicle if it has it. It doesn't mean that's their final choice. But if you think about 85% of them will only consider a product unless it has it, there's just so many features that we see out there that have that type of response. So truly, when people experience it, they love it. And the feedback we've been getting is give us more and more and more. So we're working on that.

Yes. I think that survey squares with some of the other things that we've heard around this where you've got 85% to 90% plus retake rates. When you mentioned earlier the enhanced version of Super Cruise, can you just explain a little bit more detail around what's new and the difference between Super Cruise and Enhanced Super Cruise?

Yes. Like I said, the more and more and more is pretty loud and clear to us. So we've enhanced it in just about every way. We've improved our sensors. We've improved our communication throughput. We've improved our compute platform. We've improved our software. So all in all, the system is much easier to engage. We've improved the user interface. We've already mentioned, we've expanded the roads over 70,000 miles to 200,000 in the last year. And we're continuing to work on that. There'll be more that to come. We've improved the situation awareness. I mean the radars that we've added have a higher resolution. The cameras have a higher resolution, and so we can more accurately predict what's happening around us. Our lighter maps improved. We've gone to what we call lane level data. So we have precise information for each lane, where the center is and what the curvatures are. And then we've added some cool things. For instance, on the more, more and more, Super Cruise will stay in control when you go from highway to highway on their on ramps. So today's system, you have to disengage and then reengage. We'll continue to control through there, so it's more of a continuous experience. We've added Lane Change On Demand. This is where when the driver initiates a turn with the turn signal, the system will automatically find appropriate gap and change lanes to the next lane. And that system, I'm excited for customers to experience it. To be able to manage, say, a high-speed car coming from behind us, we need to see far-enough distance. So we added rear-facing radars to the system such that we can appropriately see the traffic coming, and we can manage those incidents where there might be a larger speed delta and clearly and confidently make the lane change. That all goes together with a very detailed driver interface where we let the driver know each step of the way what's going on. So we're really happy to see that coming. And a lot of this was enabled with our new Vehicle Intelligence Platform. Like I said, we needed more bandwidth for the data processing power, and so this new enhanced version will be available on all of our VIP-enabled platforms going forward.

That's great. And Scott, just -- and so people on the line, I remind you, you can write in your questions. Two more from me, and then we'll go to some of the audience questions. Scott, I wanted to talk about this idea of Vehicle Intelligence Platform for GM. What does this new set of features basically unlock for the vehicles?

It's really -- one of the aspects really is that the cybersecurity has greatly improved. That goes without saying. But it's an all-new electronic platform for our next-generation of vehicles for our EVs. You can imagine all of the new features coming with Active Safety. We're talking about today, infotainment. The bandwidth needed to process all of that information is one of the areas where our VIP is pretty key, too. And then the other thing that lets us do is add comprehensive over-the-air updates. Today, we do it with our maps. We over-the-air update our maps frequently. In today's system, with the VIP platform, we'll be able over-the-air update more comprehensive performance upgrades as well. So that's one of the big knobs that we see going forward to keep the system improving and getting better with use and experience.

And then the last one for me. I mean, you have such a unique role, right, as integrator of both the EV and the AV side. Can you talk about some of the advantages and the disadvantages of working with electric vehicle for some of those features like OTA?

Yes, yes. Well, the EV is much more an advantage for our full autonomous vehicles. Obviously, the compute loads and sensor loads with that level of system require a very smooth, clean power. And that's one of the things EVs have readily, easily attainable. But also just in the precision of the control, the smoothness of an EV, it makes it that much easier to integrate a control system with an EV just because it's consistent. There's not a cold start or a shift or that type of stuff. Not that it's impossible, but the EVs have made that a little simpler, which is always helpful when you're doing a system that's complex. But for Super Cruise, we integrate this across our portfolio. We've developed a system to operate on our 12-volt power, and we've gotten the compute and the sensor loads down to a manageable level that way. So it's -- this advantage is much more for the AV at this point. And plus where our robotaxis are targeted in a congested environment, I think it just works better overall to have an EV in that situation as well.

Great. It's pretty active in the question box. I'm going to try to summarize some of these. But your first question is around this idea of monetization for Super Cruise. Could you talk about -- could this be a subscription model? Could -- given OTA, could you take in Super Cruise take rates post? Just how you're thinking about the monetization side of these enhanced features.