General Motors Company (GM) Earnings Call Transcript & Summary

Good afternoon. Very pleased to get what many would consider the keynote of our Barclays conference. We're very pleased to have with us the GM team: Mary Barra, GM Chairman and Chief Executive Officer; Doug Parks, GM Executive Vice President of Global Product Development, Purchasing and Supply Chain; and Travis Hester, who had been in Customer Experience and Canada before that, but has just been appointed the GM Chief EV Officer. I think we'll hear more about that during the presentation. So with that, over to you, Mary.

Well, thank you for the introductions, Brian. We really appreciate all of you joining us today. 3 years ago, at this conference, I laid out our bold plans to create a profitable all-electric future, aligned with our vision of a world with zero crashes, zero emissions and zero congestion. I said that our zero emissions future would build on the groundbreaking Chevrolet Bolt EV, the industry's first affordable long-range EV, and this would -- future would comprise of a portfolio of desirable, obtainable and profitable EVs, underpinned by an all-new global platform, delivering at least 300 miles of range, and powered by batteries that provide greater range at a lower cost and supported by a robust open-standard EV charging ecosystem to encourage consumer confidence and mass adoption. And then we quietly went back to work. Within months, we accelerated our ongoing business transformation so we could redeploy resources and move faster toward our transition to EVs and AVs. We reorganized our global product development organization. We optimized or redeployed capacity. We secured critical partnerships to improve efficiencies and scale. And we focused on hiring the right talent to win in EVs. Today, we have 20,000 software and electrical engineers, with plans to add more. In retrospect, some of you may have thought we were being a bit too quiet about all the hard work going on behind the scenes. So in March, at a special EV Day, we opened the doors of our state-of-the-art GM Design Dome here in Warren, Michigan to give you an in-depth look at our LTM platform and a peek at some of the all-new EVs in the works, including the GM HUMMER EV and the Cadillac LYRIQ. Just 2 weeks later, when the pandemic shut down much of our North American operations, we heard whispers that we might have to delay or scale back our EV initiatives. We didn't. In fact, it was never on the table. We resolved, as a leadership team, to move even faster to accelerate the transition to EVs. Since then, you've watched us do everything it takes to capitalize on the enormous EV market opportunity ahead. We are leveraging our iconic brands, technological innovations, design, engineering and manufacturing expertise and our scale in a way that is changing how customers and investors view our company. This is how we will win. And it's why Doug, Travis and I are so excited to be with you today. The all-electric future we are building at General Motors integrates all things we do best, so we can put everyone in an EV, generate profitable growth and create shareholder value. We are pivoting to a growth strategy and a zero emissions future from a position of strength. To drive and guide our profitability moving forward, our growth strategy is a 360-degree view of the business designed around delivering world-class customer interactions. This strategy is the context for every business choice we make as we move forward. It is a compass for where we are going, and it supports the pursuit of our vision. It encompasses product leadership in EVs and AVs and continued dominance in pickup trucks and SUVs; licensing and monetizing our proprietary platforms and developing new software and services; leveraging our scale and our manufacturing capabilities; building a diverse, equitable and inclusive team; and holding a steadfast commitment to good citizenship through sustainable operations and a leading health and safety culture. Today, we want to focus on how General Motors will profitably grow by delivering a very broad EV portfolio that will drive consumer adoption and create shareholder value faster than many people think. We'll do this with beautifully designed EVs across brands and price points, technology development that improves range and lowers cost and an exceptional customer experience with services our customers expect and that create new revenue streams. EVs are core to creating GM shareholder value. The drivers behind our profitable ICE business translate to EVs and will help us build on our momentum and grow profitably. These include improving speed to market with a dedicated EV organization that I'll talk about in a few minutes; iconic brands and industry-leading customer loyalty; product development, design and manufacturing expertise, including our network of safety labs, proving grounds and other test facilities; a distributed network that ranks at the top of sales and service satisfaction studies year after year after year; and our global scale to spur mass EV adoption. We've developed these assets and capabilities over decades. They are real competitive strengths that start-ups will struggle to match. As I just hinted, we are announcing today that we are creating a dedicated EV organization called EV Growth Operations. It combines the start-up agility with the strength of the General Motors team. Leading this team is Travis Hester, as Brian just shared, our new Chief EV Officer. The team will be entirely focused on the EV business and driving mass consumer adoption. He will be empowered to minimize complexity and make decisions fast. Travis will report to Mark Reuss, GM President, and also with -- to Steve Carlisle, our GMNA President. He has spent the past year working to elevate every customer interaction and experience to world-class levels through our entire purchase and ownership process. As President of GM Canada, he created the largest automotive software engineering workforce in the country and expanded its innovation network through partnerships with universities, start-ups and business incubators. With this team in place and as technology continues to evolve and become more affordable, combined with our size, our scale and our skills, we will be poised to lead in EVs and importantly, to do it profitably. And I want to note that we're not simply reorganizing our teams. This is part of a broader cultural transformation to position our company to lead in the future of mobility. And I can tell you, that team is excited and committed. Along with our dedicated EV organization, our integrated strategy is a competitive advantage for GM. Given our scale, we'll realize $2 billion in cost efficiencies alone in shared engineering, manufacturing, marketing and corporate cost. Then add our iconic brands, industry-leading customer loyalty and established sales and service network, also 100 years of experience at vehicle validation, safety, testing, manufacturing and design. You can see our design approach in the beautifully crafted vehicles like the GMC HUMMER EV and the Cadillac LYRIQ. LYRIQ scored the highest of any vehicle ever tested in our vehicle confirmation clinics. It was the highest-rated in interior and exterior appeal among all vehicles, luxury and nonluxury. And then there's the heart of our new EVs, our proprietary flexible Ultium platform. But the real value we bring isn't just one aspect of the business alone. It's how we bring it all together for our customers. Let me share one compelling example. Up to 80% of ICE vehicle costs that don't involve propulsion are also shared on EVs. It's another reason why we believe developing EVs is core to growing our business and creating values for shareholders. Our work to accelerate our EV and technology leadership is a significant undertaking. But we know we control everything it takes to lead and to win. We will invest an additional $7 billion in EVs through 2025, bringing our total investment in EV and AV to over $27 billion. Included in this figure are the vehicle and propulsion investments we need to earn market share leadership in EVs in North America. It also includes additional EV assembly capacity and battery capacity on top of what we've already announced so far: Factory ZERO in Detroit; Spring Hill assembly in Tennessee; and our Ultium Cells JV in Lordstown, Ohio, which, by the way, is ahead of schedule. We began hiring more than 1,100 new employees at the battery manufacturing facility just a few weeks ago. This additional investment means our CapEx will exceed our normal annual run rate of $7 billion through at least 2023. It also means we will spend more on EVs and AVs than on gasoline and diesel-powered development. In all, 60% of our product development team resources will be dedicated to EVs and AVs. To help drive growth and further widen our competitive advantage, we announced that we will hire 3,000 new employees across engineering, design and IT through the first quarter of next year to help us reinvent the future of product development and Software as a Service in our EVs. And we are funding all of these investments with internally generated cash flow. The first pillar of our capital allocation framework is to reinvest in the business, and we are doing this to drive growth. We will strengthen Ultium's competitive advantage, support best-in-class EV manufacturing and create compelling EVs that will improve our market position and generate growth. For example, in the U.S., just increasing our share in the top 10 BEV states to match what we achieve in the rest of the country would add 2 percentage points of market share growth, representing 2,800 -- 280,000 units. As we focus on growth and on accelerating a zero emissions future, we are always open to partnerships that have the potential to improve scale and to validate and monetize our investments. This year, we expanded our long-time relationship with Honda with 2 important initiatives. We will jointly develop 2 EVs for Honda using the Ultium platform. And we also agreed to explore codeveloping a range of vehicles and cooperating and purchasing R&D and connected services. We expect others will be interested in licensing our Ultium technology as automakers and other industries meet increasingly higher market demand for clean power. So now you know we're all in on investing to establish leadership in EVs. We're committed to fighting for EV market share until we are #1 in North America, achieving margins similar to or higher than our ICE business and exceeding our previous target of selling 1 million vehicles globally by mid-decade. So let's talk about the vehicles that will get us there. The GMC HUMMER EV, which we unveiled last month, combines the best of everything GM has to offer. It will be the first off of our Ultium platform. We know truck buyers. And we use these insights to create a super truck, a category-defining flagship EV that's priced competitively with premium trucks and SUVs in the market today. HUMMER EV customers will benefit from innovations like Super Cruise; OnStar; and our vehicle intelligent platform digital architecture that enables all of it; as well as 4-wheel, independent air suspension; MultiPro Tailgate; and other design and engineering features that distinguish our trucks. The HUMMER EV has everything you would expect from a super truck bearing the HUMMER name. It has cool and capable functionality like CrabWalk, Extract Mode and Watts to Freedom. Its modular Ultium battery platform supports multiple configuration at price points competitive with high-end trucks and SUVs in the market today. Customer reservations have greatly exceeded our expectations, and we look forward to delivering them next fall. Another great thing about the HUMMER EV is what the development team was able to accomplish in a compressed amount of time. Inside the company, we talk about the need to work at ventilator speed, referring to how we joined with Ventec Life Systems to launch ventilator production in just 30 days from our first meeting. Earlier this month, on the earnings call, I noted that the HUMMER EV team remarkably cut development time in half by working fast and by leveraging virtual engineering and the simplicity and flexibility of the Ultium system. It's the product development equivalent of ventilator speed, and you will see more of it. Based on what we learned during our HUMMER EV development process, we expect to cut development time of our future EVs by nearly 50%. So as a result, we expect that the Cadillac LYRIQ will arrive in the first half of 2022, approximately 9 months earlier than we originally said. In addition, we are pulling a total of 12 EV models forward. We're revamping and resetting the entire portfolio plan and moving fast, especially in our higher-volume plays, some of which are moving forward as much as 40 months. In the U.S., by the end of 2025, approximately 40% of our entries will be BEVs. We plan to launch 30 new EV models globally by 2025, and 2/3 will be available in the U.S. Cadillac, GMC, Chevrolet and Buick will all be represented with EVs at price points for families, for work, for adventure and for performance. We are also preparing a comprehensive EV fleet strategy to make even deeper inroads with commercial customers, and we'll have more to say about that early next year. Now Doug will dive deeper into our EV propulsion leadership and what it means for improving range and reducing battery costs to industry-leading levels. We intend to be the industry benchmark. And Doug's team is already testing second-generation Ultium technology with very encouraging results. When Doug is finished, he'll turn the presentation over to Travis who will announce our Ultifi platform. It reimagines the customer experience as part of our all-out pursuit of global EV leadership. And then I'll wrap up and hand things back over to Brian.

Thanks, Mary, and thanks to Barclays for the opportunity to talk with you today. Like Mary said, we have a great story to share on EVs. And fortunately, it's a story I never get tired of telling. The short version is, if you compare us to the competition in the EV space, we believe we have more flexibility, more versatility, more scale and more experience than anyone else. And we're putting together a full portfolio of electric vehicles in a variety of styles and price points more cost effectively than anyone else. So let me explain how. The Ultium platform is the foundation of our EV strategy, the drive units, power electronics and battery pack. We developed it as the foundation of our EV architecture, minimizing part count and maximizing flexibility. And it sets a new standard for configuring a common set of components in many different ways. Our propulsion systems can be tailored to accommodate almost all individual vehicle needs. The drive unit family, Ultium Drive, consists of 5 drive units containing at least 1 of 3 different motors that enable front-wheel drive, rear-wheel drive, e-assist all-wheel drive and ultra high-performance all-wheel drive, from anything from a compact vehicle, to the 1,000-horsepower GMC HUMMER EV behind me. For batteries, a super-efficient common cell is the key to all this. We will use one super-efficient common cell for all applications. That's why we're designing and making our own large-scale high-energy cells that will be the basis of our entire electric lineup. Inside this cell will be our latest, most-efficient NCMA chemistry, with the ability to iterate and improve as the technology develops. We design our packs to use the smallest number of the largest cells possible. Because they're rectangular, our cells stack efficiently into modules, with less wasted space between cells than modules with other form factors, and with fewer electrical interconnects and a simplified cooling system. This will yield battery options that will have from 50 to 200 kilowatt hours, enabling ranges as high as 450 miles. These cells can be stacked horizontally or vertically into modules, depending on vehicle profile needs. This flexibility enables both pouch and prismatic cells to optimize our global footprint and increase our cell options. Using this approach, we can serve different customers in different markets, in different segments, while also helping to future-proof the energy storage system. That's because when new technology and chemistry become available, we can change the cell while preserving the overall battery architecture. This flexibility will enable us to build EVs in every segment, from performance vehicles, to family haulers, to work trucks. And we don't have to reengineer specific components, from battery packs, to the wireless battery monitoring system within them every time we bring a new vehicle to market. This will speed development time, and it will reduce complexity and thus, material costs. If you look at the modules themselves, you can see the flexibility that enables our broad portfolio. Each module is the basic building block of a pack. These modules are interchangeable for many different configurations. Vertical stacking of cells within modules helps us to build EV variance of America's most popular vehicle segments: trucks, SUVs and large crossovers. That's the image on the right. Horizontal stacking enables low-slung performance vehicles that are part of our DNA as a company and seen on the left. And in the middle, we show an image of what we use for those vehicles in between, like midsize and compact crossovers, which are also very popular here and in other global markets. We can make single stacks of 6, 8, 10 or 12 modules for popular crossovers, or we can double-stack as many as 24 modules for the power and capability needs of large trucks and SUVs. And as I said, the beauty of this is that we're doing all of this using one common cell. And this shows exactly what we mean when we talk about how scale can give us an incredible advantage. Let's say, for example, you put 24 of these cells in a module, you put 10 modules in a vehicle and you sell 1 million vehicles, that's 240 million of the exact same cell in that scale. This scale will also allow us to leverage the benefits of our strong purchasing, high-scale manufacturing and supply chain capabilities while minimizing and spreading engineering investment in capital. And it's a big part of what will get us to the leadership position in cost and performance. We'll leverage this technology, together with our other manufacturing might to bring EVs to market quickly, with quality, strong capital efficiency and low material cost. That's how you win. We've talked a lot about the cost curve. At the risk of repeating myself, I'll say it again, it begins with a common cell. That gives us scale because we're making the same cell in huge quantities that improves quality, too. And it gives us the agility to work in every vehicle segment. If the market shifts, we don't need to retool cell plans. And finally, it enables continuous innovation. Our manufacturing approach also affects the cost curve. It's a complex and developing manufacturing process, and having a strong joint venture like we do with LG is the way to win. Manufacturing joint ventures allow us to excel in operating equipment efficiency, first-time quality and waste recycling. And combined with LG, we've already leveraged this experience by creating virtual simulations of build and actually reducing build equipment and costs. Another benefit is value chain optimization. We will combine GM and LG Chem supply chain leverage to create a best-of-both-worlds advantage for supply costs. In addition to all that, to really move the needle on EV costs, we must focus on battery chemistry and hitting breakthroughs that will increase energy density while reducing material cost. We see high potential in silicon and lithium metal anodes, chemistries that will improve vehicle range and affordability even beyond the gains our customers will see from our first Ultium-based EVs. By the time we get to the next generation of Ultium, which we're already working on, likely by mid-decade, we'll see a 60% cost improvement versus the Bolt EV, for example, while getting twice the energy density. This is big stuff. For this and many other reasons, we expect to be on the leading edge of performance and cost compared to anyone and everyone else in the EV space. For our next-generation Ultium chemistry that I referred to, GM R&D will lead the way. We have already created prototypes of our next-gen chemistry that are more than halfway through durability testing. We created these new cells at our R&D Cell Fabrication Lab that opened in 2015. And yes, we have that capability in-house. As some of you may know, we also have North America's largest battery test and validation lab, again, in-house. And we've begun construction on a new production cell and manufacturing process lab to allow us to continually improve our cell design and manufacturing capability. The bottom line is we are developing deep battery, technical and process expertise. We are pouring that expertise into our Ultium EV platform. And we believe we are on the battery cost frontier today, and we intend to set the pace for the future. A proof point of our commitment to lead is the $27 billion Mary talked about that we will spend between 2020 and 2025, including investments to drive battery cost and performance leadership. That's a significant investment, and we expect significant results. And we expect to see those results quickly. For many of our Ultium EVs, we are shortening the product development cycle by as much as 50%, as Mary mentioned. The foundation of this accelerated development is the Ultium platform. Our shortened EV development time is also a result of how quickly we develop the HUMMER EV and what we learn while doing so. Key enablers here are empowered EV teams that are colocated and challenged to go fast. This includes a culture focused only on what makes the product better, more profitable or faster to market, a culture that says it's okay to take calculated risk on the path of success, a culture that knows a winning product is the only thing that matters. A proof point of this culture is our recent 0 parts late, unprecedented for us, to our first production build phase of the new HUMMER EV. Other key enablers include early alignment on a single-styling theme, as you can see, that's pretty easy to do; heavy systems modeling, simulation and validation; eliminating the prototype hardware phase; and direct release of math to production tools, cutting over 1 year off typical hardware iteration. We're also applying the learnings of our recent strong launch success, including T1 trucks and SUVs, into our EV launches. With these highly empowered teams in place and thousands of new hires on the way and with technology continuing to evolve and become more affordable and with our size and our scale and our skills and our commitment, we will lead EVs and we will do so profitably. Another key enabler for our new platforms is our new vehicle intelligent platform, or VIP, the innovative digital electric architecture that will underpin nearly every GM vehicle globally by 2023. VIP will greatly enhance the customer experience that's at the center of our strategy and our universe. And you'll hear more about that here from Travis soon. It's capable of over-the-air software updates, not only for upgrades, but also to add features. It was developed leveraging all the experience and intelligence we've gained from a quarter century of OnStar. With future feature upgrades and subscriptions to various services, VIP supports monetization of Software as a Service. And of course, it will be 5G-capable in the future and already leading cybersecurity using protective features in the hardware and software. And finally, we will continually involve our VIP software architecture to enable improved digital services across all customer interfaces that include mobile, cloud, edge and all-in vehicle functions. By 2023, it will be on 29 of our models, including all of our T1 trucks and SUVs, and it's absolutely a game changer. Speaking of monetizing our advanced technology, we can and we'll do that with yet another game changer, that's Super Cruise, which continues to delight our customers and pile up accolades from the press and public alike. It's a recognized industry leader for its performance and its ability to keep the driver safely engaged. It was recently featured in Consumer Reports, and what they said about it is a great credit to our team. Also, more importantly, our CT6 customers tell us that after having Super Cruise, more than 85% of them said they would only consider or prefer this feature in their next vehicle. 85%. And our VIP-based Super Cruise is getting even better, with things like lane change on-demand, improved driving dynamics and more usable road systems. And this is launching here literally in days with our new Cadillac Escalade. We will have 22 vehicles with Super Cruise by 2023, including our high-volume pickups and SUVs. Utilizing our VIP platform, Super Cruise will only improve with more future enhancements and more accessible miles on the road. And then there's Cruise. Our autonomous vehicle story continues with the Cruise origin to be built at Factory ZERO, our Detroit-Hamtramck assembly facility. Last month, Cruise received a permit from the California DMV to remove human backup drivers from its self-driving cars. By year's end, Cruise will be sending out cars onto the streets of San Francisco without gasoline and without anyone behind the wheel. So this is huge, of course, because safely removing the driver is the true benchmark of a self-driving car and because it brings the future that much closer. It's not the only news Cruise has made lately either. Walmart just announced it will use autonomous vehicles from Cruise to test an automated delivery service starting in early 2021 in Scottsdale, Arizona. Customers will be able to place an order online from their local Walmart and have the goods delivered contact-free. This is only the beginning of the AV revolution, and we continue to make significant progress with our AV development. We're convinced this breakthrough technology will change the driving world. So thanks for your attention. And now I would like to turn it over to Travis Hester, who will describe what all this means for our customers. Travis?

Thanks, Doug. From what Doug just covered, it's clear how far and how fast we're progressing on EV in terms of product and development. And it's a very powerful story. But we know that mass adoption of EVs requires more than winning technology and products. We need to address customer preferences and provide them with a new and exceptional experience. So while Ultium underpins our upcoming EV hardware, Ultifi underpins our customer experience commitment for those EVs. It's a digital unification platform across the entire journey: purchase, onboarding and ownership. With the customer at the center of our growth strategy, our priorities are simplicity and efficiency with unprecedented convenience and flexibility. Ultifi consolidates many different customer experiences into one unified platform. A single Ultifi ID manages everything from payments and parts, to loyalty programs, subscription services and more. A few of the key elements of Ultifi are we're going to simplify the shopping and purchase experience for EV buyers with new levels of transparency, speed and convenience. With our dealership network, we will use EVs as an opportunity to dramatically improve our industry's use of e-commerce and digital retail. You can see early evidence of this with the HUMMER EV, clear and simple pricing, with a fully digital reservation system. When customers choose to shop and buy online, visit the showroom or a blend of both, we'll optimize those experiences. We have also rapidly enhanced existing online tools like Shop-Click-Drive, with much more to come in 2021. Beyond the shopping process, we're building an entire ecosystem consisting of EV education, onboarding and ownership initiatives designed to drive further adoption. And dealers will benefit from education activities GM is offering directly to the consumer, like one-on-one interactions with GM EV experts. And software and services provide a major growth opportunity, also a very important element of the customer experience. GM already manages mobile apps for all our brands, with about 33 million interactions per month. We're launching a completely redesigned mobile app, which is really cool. And we will integrate and expand the Energy Assist feature so owners can monitor and control battery charge functions from their phone and adding a host of all-new features. We're also expanding remote personalization, real-time vehicle notifications and alert features. In addition to the mobile app, we will continue expanding our over-the-air update capabilities. Our OnStar and connected vehicle expertise, combined with our Vehicle Intelligence Platform, will allow customers to enhance their vehicle experience over time through downloadable vehicle upgrades, through services and through onetime purchases. Over-the-air is very important because it can keep customers more engaged with our brands. We are ultimately demonstrating this capability currently at scale. We make over-the-air map updates to Cadillac models with Super Cruise. We've already deployed the Alexa over-the-air app to approximately 1 million vehicles, the largest over-the-air rollout of any automaker. And of course, charging is a key element of the EV ecosystem. We're looking at this as an opportunity to encourage mass adoption by building customer confidence in charging and making it a frictionless process. Our goal in home charging is very clear. We want to have home charging units installed before the customer even takes delivery and embed it into the purchasing and delivering process. We'll sell a comprehensive set of branded charging infrastructure products to provide convenient one-stop shopping. We'll develop home energy management tools to help the customer charge in the hours when energy is expected to be the cheapest and all in a one-click solution. To capitalize on the huge opportunity for EVs in the fleet and commercial world, we'll work to enable a full suite of charging solutions, fleet management software and energy management tools. And of course, public charging is critical as well. For example, our partnership with EVgo, the nation's largest network of fast charging stations, provides great knowledge of public infrastructure, and EVgo will add 2,700 charging stations over the next 5 years. GM is looking forward to more public and private partnerships to encourage EV adoption for all of our consumers. And finally, the new customer experience we're building extends to a service that every vehicle owner needs, insurance. And yesterday, we announced the OnStar insurance program, which begins soon with a pilot program. In collaboration with our insurance carrier partners, the product will eventually use data from the vehicle's OnStar system to determine individualized pricing based on driving behavior. Our vision is to make the insurance relationship a more transparent, fair and controllable experience that helps keep every driver safer. It's a natural way to leverage OnStar's trusted safety and security services, and it's another example of how GM's leadership in connectivity can help our customers potentially save money on auto insurance, while encouraging safe driving. So thanks for your attention, and I will now turn the presentation back over to Mary.

So thanks, Travis, and thanks, Doug. And I appreciate everyone's attention this afternoon. We've covered a lot today. So I want to reiterate that electric vehicles are a cornerstone of our growth strategy and that we have everything in place to drive mass adoption of EVs and make our zero emissions future a reality. Our scale, our product leadership, our technology platforms, our services and our commitment to a world-class customer experience will distance us from our competitors, and it's why we will win. When we look at what has happened in the world and in our company during the past 3 years, I hope you can see how far we've come in the race for EV leadership, to achieve meaningful and sustainable growth. By this time next year, many of you will have firsthand experience driving or CrabWalking in our EVs, starting with the GMC HUMMER EV, and then we'll be gearing up to launch the Cadillac LYRIQ. And right after that, we'll have an onslaught of mass market vehicles from Cadillac, Chevrolet, Buick and GMC in North America and in China. I know Brian has questions, so I'll turn the program back to him. And again, thank you for your attention, and I hope everyone is staying safe.

Thank you, Mary, and thank you, GM team. Just going to Slide 26 and the battery cost reduction goals. The last time I think you formally -- or at least when you initially put out cost, you talked in 2016 about -- or actually, at the 2015 Analyst Day, about $145 per kilowatt hour on a cell basis, with a goal of getting at $100 on, again, on a cell basis by late 2021. So with packs, rule of thumb used to be 30% to 40% more. That would imply kind of $130 in 2021. So is that the Bolt EV baseline? Is that the Ultium baseline? And in terms of rough-cut dollars per kilowatt hour on a pack basis, what are you saying about the next-gen Ultium battery?

Do you want to take it, Doug?

Yes. Sure, Mary. So Brian, time marches on, so to speak. And the chart that I showed today shows 40% and then 60% from Bolt EV costs today. And Bolt EV costs today are a little better than they were back in 2015, 2016. What we had said at our EV Day is our cell cost would be below $100 when we start Ultium. I will tell you that we've made progress even more than that. And so that 40% of the cost curve definitely gets us in the sub-$100 per kilowatt hour at the start of Ultium, almost at a pack level now, and then an additional 20% below that when we bring on our next-gen chemistry. So we've been making progress, and we've looked at everything that's out there and our competitors and everything else and we absolutely think we're on the leading edge of this curve as we develop this technology and frankly, bring it in-house.

Okay. And in terms of the CapEx slide, you -- is there any way -- okay, we kind of looked at the 2023 number. Does that represent sort of a new normalized run rate? Admittedly, '21 had catched up for COVID-related spend, and it looks eyeballing at kind of $8 billion to $9 billion. Is that about right? Or what would you think about kind of normalized CapEx?

Well, again, what we said is we're really accelerating our investment in EVs. And then because of the impact of COVID this year, you see it going higher in '21. We haven't put a specific number other than to say it will be greater than our previously stated normalized number of about $7 billion a year. And that's a pull ahead, so that's why we're sharing between the '21, '22 and '23 time frame is where you'll see it elevated above $7 billion. And we'll share more as we get into next year and provide guidance.

Okay. And back to the battery cost question, I've got an e-mail. What -- if you kind of think of the breakthroughs to get to the 60% cost reduction, what are the breakthroughs that are needed? How much is, depends on additional lab work, how much is in the lab? And depends on being able to scale volume manufacturing, then how much is pretty much we just need to scale up and get to scale down?