General Motors Company (GM) Earnings Call Transcript & Summary

For our next presentation, we have General Motors. Very pleased to have from GM, Doug Parks, Executive Vice President, Global Product Development, Purchasing and Supply Chain, and he's joined by Mike Heifler from Investor Relations here for tactical support. Doug, there's so much to talk about the genre and even recently, the news flow around GM specifically on electrification is really coming fast. I know you're going to have a very big consumer electronics show as well. So without breaking -- without spoiling being -- spoiler too much on that because I know you got a big event tomorrow, I wanted to give you a chance off the top to give some of the key things. But before I do so, I just want to remind folks that this call is for Morgan Stanley clients only, not press and that for important disclosures, please go to www.morganstanley.com/researchdisclosures. And for questions, and I see well over a couple of hundred people we're coming at -- I mean, well over 200 people now on the webcast, which is fantastic, please submit your questions now. I'll come up for air and try to get to as many as we can. We want to make it interactive, but don't wait until the end. So just get it in now, and we'll do our best. So with that, Doug, thanks for being here, and Mike. And why don't you give us the key mission from the D.

Thanks, Adam, and I hope everyone's having a good day. Kind of our mission, and what I want to talk about today, of course, is electrification. We've been talking about it a bit here in the past. You guys got to believe GM is all in on electrification. As we've said, we're going to implement or introduce 30 new models by 2025 across multiple brands, multiple segments. So we're not just in it for a couple of entries. We're in it for the whole portfolio. The underpinnings of that or the reasons why we're able to do that profitably, our approach to electrification architecture, we've been working on this for quite a while. We started with the battery. The battery is the most important thing in electric vehicles. And frankly, in the battery, it's the cell and it's the technology. So we've got a very aggressive schedule of chemistry, not only for the first launch of our Ultium architecture, but we have updates planned that will go in the same format cell, and then that cell is repeated into modules, which have been repeated into battery. So it's a very smart way of building scale and flexibility to use in a lot of different portfolio entries. One of the things that enables this -- well, this is the main thing that enables our large portfolio of entries is this approach on our batteries and our Ultium architecture. I can talk about drive units, similar kind of approach. But we think it's absolutely the way to get high scale, low-cost EV vehicles. And frankly, we do have to get on a forward edge of that cost performance curve. And that's what will lead us into higher volume electrification. So that's really why we're doing it. We're vertically integrating it. We have our R&D labs. We're hiring a lot of engineers. We're partnering with great companies like LG, but we're also looking outside at other start-ups and other methods to get on that front edge of that learning curve. We've got some proprietary technology I can talk about -- well, a little bit. And we've got some very aggressive improvements. When we launch our first Ultium architecture-based vehicle, we'll see over 30% cost reduction between today's Bolt and that launch. And then we've got a second-gen we're already working on. It will give us another 30%. So kind of combined 60% cost reduction from where the Bolt is today with double the energy density. So that's happening in the -- I'm just going to say, in mid-decade, with potential of things happening -- specifics happening even before that. So we're spending a lot of money to do this because we believe in electrification. We believe in portfolio-wide electrification. We're going all in. You guys -- and we've talked a little bit about the money we're spending, and just excited to be here and excited to talk about it. So that's my -- kind of my intro, Adam. Fire away.

You threw a lot in there. You threw a lot in there to chomp on. Let's start with the things that, in my opinion, I think, differentiate GM's electrification strategy from a lot of your competitors and even a lot of the start-ups is the clean-sheet approach, and the level of vertical integration. And I think it does still differentiate. I think you're seeing a lot that are realizing that the market is moving your way. But Doug, for this audience, explain why both are so important. And while you do that, kind of help emphasize how far it goes in terms of vertical integration, in terms of what you do in terms of IP and then where your partners help you, where that line is drawn or even if it's not a line?

Yes. Thanks, Adam. So we've been at this a while, right? We did -- I -- my team implemented the first Bolt, the second Bolt, and we implemented the Bolt. And we still have one of our chief engineers who is part of EV1. So we've learned a lot over those programs and some of the things we've learned, 2 of the biggest pieces are really that you can't do a single vehicle execution. If you take an ICE vehicle or an existing architecture and you try and implement electrification on it, you can do it, but you're going to -- it's going to be compromised, you're not going to have the best cost position, et cetera. So we knew some time ago -- a matter of fact, my previous assigned up before this one, Mark kind of got on the phone with me, and we talked about it, and we knew we needed a different approach. And so we went out, we started creating this thing that we eventually named Ultium, which is how do you make the most -- how do you take the most efficient design approach you can for the battery, and the battery is the significant cost here, right? I know that's not new news to anyone. But that development is what's really going to transform us to an EV world. So we went after that. And we said the body architecture and the corners, the suspension, the traditional architecture pieces will come after we've optimized the battery. So we came up with the approach to take a single -- the most efficient cell format, which is a pouch cell format, the largest cell format we can because then you have the most efficiency and the least air space, if you will, in the battery. So we took that approach. We started building modules, and then we can go from 6 to 8 to 10 to 12, frankly, to 16 to 20 to 24 modules of the exact same cell when you get all the way up to a full-blown hummer EV versus a smaller SUV that's more high volume, lower price. So that's the flexibility in this thing. And that absolutely required a clean-sheet approach. And so once we did that, we started building out the portfolio, and that's kind of how we got to all the entries that we're going to bring forward today. The other key thing about that cell is we are -- we believe we are the best engine and transmission designers, industrialists, efficiency experts out there. And you have to have that capability in this -- in our automotive industry. So if you're going to go into electrification, how can you not go into electrification without having all that capability on battery chemistry and the way cells are designed, the way cells are manufactured. So that's why we have an R&D lab where we can make our own cells. We're actually going to open a new battery development center where -- so we have a big battery test lab, that some of you who -- might have been, Warren, Michigan, that's where we do all the validation hardware testing, we have an R&D lab that can make really small format cells. We're also now going to break ground on an all-new battery development lab, where all these chemistries in the full production size format, both design and engineering and manufacturing can all be validated. So we need to become battery cell experts. Now we've got a great joint development agreement with LG. We've got a JV agreement to build cells. So we're going to work with our partners and add our expertise to their expertise to create some of this great technology going forward, but we're also working with frankly, all the best startups and the best approaches to the next-gen chemistry and then the next-gen and then the next-gen. And our intention is to pour that into our LTM architecture to get on this curve and stay ahead of it. So kind of a big answer to your question, Adam, but it's a big deal.

Well, let's move it further here. I think it's clear that Ultium isn't just a cell. It's not just a battery. It's an architecture to your point. And that architecture goes beyond the battery as well to the design of the vehicle, the structural components, the powertrain, the software. Can you kind of emphasize the audience then as we leave the battery, why it's so important? And what are the advantages are to GM for doing all of these components together, again, to my understanding, largely in-house, if not to your design? And why is all these parts added together worth more than the sum?

Well, yes, so it's kind of continuing on the same theme. By the way, we carry structure through the battery because the battery is such a large part of the vehicle, it would be inefficient to build the structure around the battery. So you carry it through the battery. And that's a much more efficient way. So when you integrate all this stuff, and that's part of what I believe General Motors also brings to the party. We can integrate all these components and drive lines. We have basically a front-wheel drive electric drive unit, a rear-wheel drive, and we have a couple of versions of the rear-wheel drive. And then we can plug-and-play those to have a front-wheel drive only, a rear-wheel drive only, a performance all-wheel drive. And so we have basically 3 electric motors that go into 5 drive units that will power this entire portfolio. So the amount of complexity reduction, if I compare the same entries within today's world to that, it's just dramatic, the amount of complexity reduction, which gets to scale and gets to leverage. And the reason that we are, at least from a design standpoint, vertically integrating this stuff, we won't manufacture all of it. If there's a partner manufacturing play that's better for us, that's a better cost play, uses combined capacity, et cetera, we'll go there. But we have to have the control of the technology and the IP to optimize it because aero and rolling resistance and efficiencies in the system and the efficiencies of your power converters can have a whole bunch to do with range and performance just like the battery. So the efficiency that all those things need to be lined up and put together to really integrate and optimize the entire vehicle.

All right. Great, Doug. Look, the question queue is building up so fast. I'm going to come up for air now and dive in, okay? So here's one. Pardon me. Here we go. Yes. Elon talked at battery day about making the battery part of the vehicle. Does GM believe that's a good approach as well? Have you rolled out battery swap? I think you've answered the first part of that question as being it part of the vehicle. What about -- what's your take on battery swap?

I think battery swap on the surface is a pretty great idea. I have a lot of electric tools and I swap the batteries, and it all works. When you call -- come to a vehicle environment, it's a very complex environment, right? The structural integrity upon crash. And frankly, the optimization I talked about, about how you carry voltage and current through the pack, the way you -- the packs have to be operating at optimum efficiency, packs have to be cooled and warmed to keep them in the zone, so to speak, the temperature zone. And it's just that we can -- we could make it so that you could switch packs, but it's a -- it's very difficult to keep that robustness and to keep that integrity. And frankly, I think you'll give up some of the efficiency and some of that integrity. So it could be done. It's really not part of our plan for Ultium. There might be a special fleet application that you could do something like that. But to really truly optimize and get on that forward edge of that curve and make these vehicles terrific and robust and durable and batteries to last millions of miles and all that kind of stuff, you really need a super tight integrated package, and that's what our play is.

Doug, we're going to fly around here, okay? One of your competitors introduced a conversion van -- a van -- a delivery van or work van, with 126-mile range. Would GM do that?

I don't think anything is really off the table. As we start -- and we're going to make some news this week at Consumer Electronics as well, Mary Barra and Mark Reuss and others, we're going to make some I think very interesting news. But I would say things -- nothing like that is off the table. And as we get closer, as we did with the Hummer and the LYRIQ and some other products, as we get closer, we're going to make more reveals. And with that Ultium platform, I think lots of things are on the table. I mentioned, when you put all the cells together, you create a thing we call a module, and we have a battery pack that starts at 6 modules. That is a kind of a low capacity, low range pack that could be put into a bigger vehicle. And if that application only needed 150 miles or something, that's doable. So I think we could do it. We're focused on each segment, what's the mileage customers need, when are they really going to turn to full-time EVs. We think that number is 300 or better. And so that's the number we're going to talk about for retail customers.

Thanks, Doug. So another question, what's the incremental cost of power electronics in the Ultium drive architecture versus ICE counterpart? Is this the second most important area of cost reduction behind batteries?

Well, batteries is, I think, 1, 2 and 3. But absolutely. Drive units, probably. Power electronics, those are big numbers. A matter of fact, as part of Ultium, we're integrating a lot of the power electronics into the drive unit so that we don't have -- so you don't have multiple modules and you can integrate it in, you can do it more efficiently. So that's what we're doing. Power electronics is a big piece of it. And yes, there's different converters, different technologies for converters, the drive units themselves. We've gone with our most efficient electric motor design and then we're reusing that motor within the drive unit. So -- and again, when you integrate all that together and you have the kind of the equation or the transfer function for the efficiency for the whole car, you can tweak those as you need with different sized vehicles. The other thing that's kind of great about electric vehicles is they become a little wider because you need a lot of battery, right? And from a design standpoint -- and by the way, they're a little heavier, so you need big tires and wheels. So my friend, Michael Simcoe, who runs our design facility, he's a friend and wider, bigger tired vehicles are a little lower to the ground. It looked fantastic. So I think that's another thing that comes along just as a -- for what it's worth in the electric vehicle space. All of our entries that we're going to be rolling out are just crazy compelling. The LYRIQ, if you've seen it, we had an [ EV day ] some people were alive, people were kind of shocked and surprised of what that was like upfront. Upfront, lots of graphics, lots of LED lighting, lots of proportion of shape and style, and we just think these are almost ridiculously compelling vehicles, Adam, and we're super excited about them with great range and can't wait to bring them to market.

So -- I mean -- and you've laid out -- I mean you're targeting 30 model, which is a very large number, and we've kind of seen the unveiling of 2 or 3 of them, right? So a lot of distance between point A and point B. So when we get past the Hummer and LYRIQ, which are admittedly very luxurious, if not high price points, that's fine. There's lots of room under that part of the market. When do we see the product, right, that comes after that part of the waterfall to say, no, we are -- we want to scale. We want to do hundreds of thousands of these. Where is that $30,000, below $40,000 price point vehicle? Where does that come in? And then when does the electric Silverado fill in on that, where you have the capability in those applications?

Well, I'd tell you, that's all part of this 30 by 2025. So if you guys can...

Is that tomorrow? We're going to hear about that tomorrow?

You might hear about some of it tomorrow. And what we're not going to do is we're not going to announce something 3 years out and then wait 3 years to get there, and then it's like, oh. So we're trying to get like the Hummer, we announced it. Now you've seen it. And if you can -- if you were to drive that thing, every unit of it is truly impressive. The LYRIQ, we're right on the edge of kind of given more on the LYRIQ. And so we're trying to get a little closer to market with those announcements. But at Barclays, Mary and I and Travis Hester gave a little bit of a kind of an overview on our approach. And there were some products in the background. A matter of fact, there was a Hummer that we hadn't announced in the background, there's a small SUV that we haven't announced, and there was a truck entry that -- those are all EV entries. Those are all within our brands, and those are all going to come out before 2025. So stay tuned. Rest assured, those entries are not -- are coming. By the way, something else we've done is we've created -- now that we have Ultium, we've created it dramatically faster, we call it VDP or vehicle development process. So we think about 2 years now is what it's going to take us to bring a new product to market. So if you already announced 30, and it takes 2 years to bring them to market, you guys can do the math, this thing is going to happen sooner rather than later.

I want to talk about Cruise and the relationship with the Ultium architecture. I mean, it just strikes me, and we've heard -- I've heard you say it before, but I want to give you a chance to kind of evolve that. Autonomous cars are better when they're electric. Electric cars make better autonomous cars. I know there are different parts of the GM umbrella, and the -- but maybe for this audience, where are they related? Where is their overlap? And why is that overlap important?

So we have -- from my previous job, we have in the company, we created when we knew we had to do something different for EVs and AVs. So there's a part of the engineering organization that's dedicated only to electric vehicles and autonomous vehicles. So that's the organization when we originally engaged Kyle and Dan and the Cruise team and put that whole thing together, that's why we're -- and to your point, we do believe electric vehicles are the right vehicle architecture for autonomous vehicles. There's a lot of power, there's a lot of over-the-air updates, there's a lot of high-tech that happens, and we port all that into our new electric vehicle programs. That's why the Chevy Volt is the one that we're doing all the testing on out in San Francisco and Arizona and in Milford as the initial platform, but we're actually moving the Cruise origin, which is the platform that Cruise will roll out AV technology. That is an Ultium-based platform. So all of the benefits of Ultium, the lower cost packs, the architecture, the driving, that all comes with the Cruise origin. And that is kind of the future deployment method for Cruise. In terms of -- so we naturally work together as we're kind of -- and we'll build it for Cruise. And as we're kind of the partner, we actually have Honda as part of that partnership. Honda is doing a bunch of the engineering of that vehicle, as part of that partnership. So that's a really unique group of individuals. The work is going pretty terrific. But more specifically, in the tech space, where we work with Cruise is -- Cruise is kind of the leading the tech, what does it take to optimize the software to solve all these very complex problems to get the vehicles to truly drive by themselves, which we're starting to do now in San Francisco. If you guys haven't heard, we actually -- we actually got vehicles on the road without drivers in them, and we're starting that. So it's super exciting times. The technology is getting better and better. And then where GM really helps that as we help the Cruise team kind of productionize the sensors. We're great at productionizing and validating and vehicle size, software and vehicle side impacts, and the Cruise guys are really focused on the magic, the software to actually make the decisions and to actually guide the vehicle. And we have a lot of things inside the company. One thing is called Super Cruise. We're moving on with improvements to Super Cruise. I'm actually -- I drove in -- I'm in an Escalade now and I just took a 900-mile trip, and 90% of that time was all self-driving in the car, changing lanes and the whole thing. And so there's opportunities to merge those technologies what Cruise is developing into the retail fleet, and there's just a lot of great capability opportunity going forward to do that.

I would love you to comment a bit more on Honda. Obviously, there's the Cruise Origin collaboration, but then the more recently announcement that you're going to make vehicles for them in the United States. Can you kind of emphasize a bit more of that relationship, please?

Yes. It's actually pretty great. We've gotten to know the Honda guys pretty well over the last 3 to 4 years. Starting -- actually, we had previously had an agreement to supply Ultium modules. So these are these cells I talked about and you put them into a module. So we'll be some -- we originally had an agreement to supply modules to Honda, and they were going to put them in their own application. Kind of a partnering activity from there. We went -- we built up the Cruise model. So Honda is a partner in that with us, and they're an equity owner in Cruise and they think that's a great way to build that technology for their organization and ours. We've since announced that we're going to work together in the Ultium architecture. And as you mentioned, Adam, we're going to build a couple of cars for Honda, but they're actually designing what we call the [ top hat ]. So we have the architecture, and Honda's kind of designing their own car, and we're integrating between our architecture and the telematics and the exterior design, we're integrating that with Honda, and then we'll be building the cars for them. And we're not done. We're talking about strengthening the relationship, either more EV entries or other segments. There's, I think, some real opportunity in the ICE vehicle segments to partner with great partners as we run that business, maybe not run it out. But as we kind of run it out over a...

You're running it out, it's okay.

Some period of time, whether the -- it's probably not 2 years, but there's a lot of sense to partner with great partners, both on the EV side, which we think is a big growth opportunity and then as we run the other part of the business out. So we just think they're really good engineers. They get along great with our engineers. These relationships can be complex. We have good work agreements. And so far, it's pretty good. And I think there's maybe opportunity for more.

Doug, we're getting a couple of questions here on distribution strategy and some of the challenges and opportunities or what GM is doing to kind of make that work. I think that the news around the Cadillac dealers and those buyout offers was very, very telling. And it shows both the challenge and the opportunity. But I kind of want to get your input on the GM strategy of making sure that the customer-facing and the continuing relationship part is executed well since you're doing all the work on the back end.

Yes, Adam, it's a great point. I think it's a huge leverage point for us. So we've named Travis Hester, who was previously leading our customer experience activity to kind of cut across all the functions for the customer. So when the customer sees GM, they see one GM, whether you've got a dealer or you're on a website or you're talking to someone within the company. So we're working on improving that. And Travis now, we're taking that into the EV space and Travis is kind of responsible for putting together all of our EV go-to-market strategies, customer experience. And so I think Travis would tell you that we think the dealers are a huge advantage for us, but we think we need to move the experience from where it is today. So we need a customer-focused experience, whether you're online, whether you're in the dealer. We need to create a terrific experience for the customer. Now that also involves servicing your vehicle. And so we think, done right, the dealers are a great advantage for us, not only at point of sale, but to service after the vehicle, but we're working on a pretty aggressive strategy to improve all that. Travis is leading it. I think it's super key. Because frankly as far as what's going, I'm an online shopper. A lot of people are. A lot of people want to do it that way. And we want to have an online direct like experience unlike nobody else, while we have the dealer involved to help augment it. It's nice to be able to take your Amazon packages back to the UPS and have them ship them back versus doing it yourself. So if you can tie all that together, I think you could make a real win, and that's what we're trying to do.

I just want to say, almost 300 people on the webcast, by the way. So pleasantly surprised. So the previous presentation was Northvolt, whose big pitch is anyone can make batteries, but it's -- what they want to do is sustainably, sustainable source energy, vertically integrated, so to kind of make that more efficient and then recyclability. So we're getting a question here. Given that kind of -- that point on transparency, and you don't want to create new ESG problems as fast as you're solving them, what's GM's approach to sustainable battery manufacturing going forward?

Well, we have a recyclable battery. I need to get you guys the number, but it's nearly 100%. I think it is 100%, but I have to double check the facts on that. It's nearly 100% of all Bolt batteries that have been made are -- have been recycled when the vehicle has been brought back in. So they are fully recyclable, and we're recycling them. We think that's a huge part of the strategy here. Same thing that goes with Ultium. We think -- how you handle batteries -- and a lot of these batteries will have a life longer than the car, right? So at the end of 15 years, when that battery is maybe 70% or 60% of its original life, it still has a huge life in balancing grid load and there's a lot of other opportunities. So we've got teams of people working in all those areas. I think it's very important to the EV play going forward. We have a huge sustainability initiative in GM. We've got solar panels in a lot of our plans. We're going to be using nothing but sustainable energy going forward. And we don't have enough time to talk about all that, Adam, but it's a big piece of it, I agree.

Okay. Got a new question here, Doug. Do you think having a proprietary network of superchargers or otherwise high-speed DC charging is a competitive advantage? How will GM ensure a good charging experience for its future EV owners?

Yes. Terrific question. It's so key -- when you're an EV driver that's so key. One of the great things, I think, is if you're able to put a charger in your own home, like it untethers you to the whole gas station experience most of the time. If you're also fortunate enough to have chargers at work, it's like a double bonus. And then the only time you really need to not charge at home or at work is if you're a cross country. And inevitably, you're going to need that charging infrastructure, not at home and not at work to tie all that together. I think you guys know we've announced with EVgo. We've got a partnership. We're building out that infrastructure. We don't really own it but -- because that's really not in our business model, but we have to enable it. So that's another big wave of development that needs this -- lots of these big things all happen and then you hit critical mass and then this thing really goes. So we're putting in thousands of charge stations at GM facilities. We're working with EVgo with capital to build out the network and use analytics on where those charge stations go. We want to continue to connect to all the charging stations. We have apps. On your Bolt today, you connect all those. We think that's part of the customer experience, connecting all that for customers, making it just seamlessly easy for a customer to have access to all that. And that's our approach.

Doug, I'd love to get into repurposing your existing industrial base to make an EV. I mean there's one company that's presenting later today that took -- essentially took over an old GM plant, you obviously have a relationship with them, co-investor. And if you -- I would just say, loosely, if you extrapolated their market cap or that plant in terms of your other plants, you might not be worth Tesla, but you'd be narrowing the gap quite a bit. I'll leave it at that. Kind of what goes into transitioning a legacy ICE plant to BEV, and from a human capital and a physical capital perspective, to share?

Yes. So the vehicle side of that, the assembly plant, it's not that great of an impact. Matter of fact, all of our assembly plants, we believe will be able to assemble electric vehicles in. The one -- the 2 that we've announced, Factory One at Detroit-Hamtramck and on Spring Hill, Tennessee, those are existing plants. So we're using those. You have to figure out how to put batteries in the cars, which is the biggest piece, but we've been doing that since the Bolt days. So that's doable. That's kind of in the general assembly area. And the way you install power electronics and drive units, it's different, but not that different from putting an ICE engine. So from a vehicle assembly, that's not that big of a deal, I'll say it that way. The propulsion is where it's significantly different. Obviously, an engine plant compared to a drive unit plant are quite a bit different. And then the big one, of course, is the battery. So where we've announced a lot of capital -- and part of our increase from the $20 billion to $27 billion capital, that's all kind of tied to the battery capacity issue. And frankly, there's not battery capacity laying around out there. So you kind of have to invest and create it, which is what we're doing in Ohio. And we have more investment coming after the Ohio, the first wave, we're going to need more capacity. So we're -- and that's quite a bit new, to go into what we call a brownfield and convert a plant to do that, it's almost more expensive to most efficiently, manufacture, battery anodes, cathodes, cells, et cetera. It's kind of -- it's more efficient to do a new layout. So that's why some big capital expenses there. But then we're kind of sharing capital with our JV with LG, and that's kind of our play here for a bit and that's kind of a way to make it work for both companies well.

That was one of my questions earlier, and we got a couple of minutes left. The extra step, you went from $20 billion over 5 years to $27 billion. You just said, I'm paraphrasing here, that was to address battery capacity. Is that -- how much of that is just raw units versus a different level of vertically integrating your supply chain, including raw materials? Or was it greenfield? To your point, you're saying part of that was, hey, there may actually be an all-new GPS point where we are putting a facility for a variety of -- or is it a little bit of all the things I mentioned, but just kind of -- I just want to make sure we're on the same page. I'm not misinterpreting what you said.

That extra $7 billion wasn't just for battery capacity. There's extra vehicles in that rollout of 30 that are part of that. So the $7 billion isn't all battery capacity. But there's a fair chunk of it that is. And if you started from nothing and you had to build up an engine assembly facility, that would be pretty expensive. We spend a lot of capital on powertrain capacity. We just have a lot of it. And the problem is you can't really repurpose that for battery. So now we're kind of in this window of spending up to get battery capacity. Again, unfortunately, it's not very reusable between the 2. But I don't think on its apples-to-apples comparison, battery capacity is necessarily more than the engine and transmission capacity. We have to do some analysis to give you some details on that. I don't know that they're dramatically different, but it's new, and that's kind of going with the plans.

Okay. Last question here. Doug, are you worried about raw material availability and/or costs, say, even as far out as 2030, when the industry will be making many millions of EVs, if not tens of millions of EVs?

Absolutely and absolutely. Our -- one of our overriding objectives is to get on the front edge of the cost, the performance and cost curve, we want to ride that down. We want to create new space. And we think we're doing that with some of our Ultium chemistry and then our Gen 2 chemistry. I didn't get into lithium metal anodes, and I didn't get into specific electrolytes and a lot of the stuff that you're hearing lots of companies talk about. It's one thing to have people talk about it and even do a few vehicles, it's an altogether different thing to do hundreds of thousands of vehicles that last for 10 or 15 years that have robust batteries that will last for a long time. I would just leave you with that. And since this is our business, this is what we do, we're not going to introduce technologies that don't work for 10 years and for hundreds of thousands of miles. So when we break through, we're going to have -- we know what it takes to really satisfy customers in the long term. So I think that integration of that technology is key. And Adam, I forgot, I don't know if I answered the intent of your question. I kind of got -- kind of...

No, no, that's all right. And you know what, there's so many interesting questions that are coming through at the end here. I want to squeeze -- kind of fuse one more in, if that's okay, on chemistry because you just mentioned it as well. A comment on solid state. I know you're -- the approach seems to be agnostic, but I wanted to kind of hear your approach on whether you think that there's the hype from the reality of timing and your plan of when you could integrate such a solution. And then nearer term, what other chemistries could be using in China? Tesla and others or NIO are doing like more of an iron phosphate, these different chemistries or different use cases. I wanted to give you a chance for both of those, and then we'll wrap.

Yes. We're into all of that. The iron phosphate stuff, the problem with that is it's usually lower energy. So yes, it's lower cost, but you get lower energy, lower range for it. So if you build bigger -- if you make more batteries to make up for the energy drop, you kind of -- so if you can live with a 200-mile car or something like that or maybe at 250, you can kind of do that. But to really give customers the cars they want -- so there might be applications for that. And we're certainly -- we know a lot about iron phosphate chemistry. I think that the -- nothing is perfectly clear yet. So a solid-state cell is pretty exciting for the energy density and the size, but it doesn't necessarily mean it costs less. So if I can get a high range, smaller pack that costs even more, does that really help me? It might help some performance exoticness entries, but I don't know if that helps me in the high scale stuff. What I really need is I need this 300 miles range or better and I need lower cost. And so we're -- we've got a lot of efforts going on in solid state, but there's anode technology, there's a lot going on there, specifically really dialed in on that. The electrolyte we use, there's specific electrolytes that allow certain anode technologies to work better. And then, of course, on the cathode, cobalt is a big piece of cathode and nickel. If we could eliminate cobalt, then it starts to get, Adam, where you're going. Yes, we're worried about the raw material supply. But as we transition out of cobalts and as you transition into maybe even silicons and things that are much more available, you kind of start to solve some of that supply or pricing, volume issue as you -- so I think that's the way forward, to transition to materials that are far more available with new technologies and electrolytes that give you all the energy you need for the process, while dramatically dropping the cost and I mean we have a lot of people working on that right now.

Doug, we're going to wrap. Thanks so much for your time. We'll see you and hear from you and your team again tomorrow. Looking forward to that. We'll be there. And really great overview. Mike, thanks for being here, buddy. And everybody, we're going to end this session right now. And then the next one will be with Cree and silicon carbide at 11:15. Thanks, everybody. See you, Doug.

Thanks. Adam.

See you.