General Motors Company (GM) Earnings Call Transcript & Summary

Hi, everyone. I'm Ryan Brinkman, the U.S. Autos analyst at JPMorgan. Thank you so much for joining us for the JPMorgan Global ESG Conference. We're going to get going now with our next presentation. Very excited to have with us Mary Barra, the Chairman and Chief Executive Officer of General Motors. She's got some prepared remarks. Afterwards, we'll engage in a fireside chat. Mary, thanks so much for joining us. Happy you're here.

Well, thanks for the introduction, Ryan, and thanks for inviting General Motors to participate in this conference. We're moving into this year at a tipping point for EVs and really at an inflection point on sustainability, inclusion and growth. On top of that, our underlying business performance is strong, and we are fully committed to a capital allocation strategy that invests in new and existing businesses to drive growth and achieve returns for our shareholders. Our investments in EVs and other growth opportunities are no different. We view this transition as an opportunity to lead transportation into a zero-emissions future while establishing a sustainable competitive advantage. Late last year, we announced a new growth strategy that expands our revenue-generating opportunities beyond vehicle sales to software, services and more. It is our compass for where we are taking the business, and the context for the decisions we'll make in pursuit of our vision to create a world with 0 crashes, 0 emissions and 0 congestion. ESG is at the core of this growth strategy because our business future and our ESG future are one and the same. Our approach is driving new investments in jobs, helping us attract top talent and ensuring that our owners' capital is deployed in a highly effective way. As we focus on our social and environmental impact, there is no question that our greatest ESG opportunity is an all-electric, carbon-neutral future. We have strong convictions that this future is going to happen and it will happen quickly. And because there are multiple business growth opportunities within the EV and AV space, it will also provide strong returns to our shareholders. The team delivering this brighter future values diversity and inclusion, safety and a just society and is committed to changing the world. For years, our Board of Directors has been working with our leadership team to shape a long-term strategy to replace our light-duty, gas-powered vehicles with EVs, and I will share some board news in a few minutes. So let me begin by restating our recent commitment to become carbon-neutral in our global products and operations by 2040. Decarbonizing our business is the right thing to do, for society and for our business. Last year, we made a strategic decision to accelerate our 0 emissions future, and we are investing more than $27 billion through 2025 on electric and self-driving vehicles. These investments, funded with internally-generated cash, will allow us to offer 30 EVs globally by 2025. We've signed the business ambition for 1.5-degree Celsius commitment, and we have committed to setting science-based targets that we have submitted for approval to the Science-Based Targets Initiative. We are also engaging with NGOs including the Environmental Defense Fund, and advocating for federal policies that are necessary for us to go beyond our commitment to science-based targets and work toward our aspirations to eliminate tailpipe emissions for new light-duty vehicles by 2035. In addition to our product portfolio, we are committed to sourcing 100% renewable energy to power our U.S. facilities by 2030. And we've done this at 33 facilities to date, with more on the way. We've recently announced that we will purchase renewable energy to operate our Bowling Green assembly plant, [ wholly the ] Chevrolet Corvette, through the Tennessee Valley's Authority (sic) Valley Authority's Green Invest program. By 2023, we will be more than 60% of our way toward our commitment. Globally, we will source all electricity from renewables by 2035, which is 5 years earlier than our previously stated goal. In addition to energy, water is an important resource for our business and the local communities that support us. Earlier this month, I signed a CEO water mandate, joining other CEOs in committing to address global water challenges and mapping our progress and plan against 6 core elements. As we continue to minimize our water use, we also plan to reduce our water intensity by 35% by 2035 over our 2010 baseline. We have what it takes to deliver on these commitments sustainably and equitably, with talent, technology, scale, manufacturing expertise, industry-leading customer loyalty and strong dealers, partners and suppliers. Integrating these strengths is what we do best, and we are executing with speed and a clear sense of urgency. Now that I've summarized some of our recent news, I want to focus on our social and environmental impact work, which builds on our commitment to our people and our communities and our environment. I'm encouraged by how many companies share our goal of becoming carbon neutral. We are the largest U.S. automaker to take this step, and I know we won't be the only one. It's equally important to recognize that how we get there matters. Given systemic economic and racial inequities, the way we transition to an EV future is important to you and to us. Once [Technical Difficulty] [ they center ] technology transformations often leave people behind. At GM, the transition will be inclusive and consistent with our long-standing leadership in fostering diversity and inclusion. GM was the first Fortune 500 company to seat an African-American director on our Board, the Reverend Leon Sullivan, and the first automaker to create business development programs for minority-owned dealers and suppliers and women-owned dealerships. GM has more than 290 minority-owned dealerships. They serve our customers and provide good jobs that strengthen communities. Nearly a year ago, I announced our ambition to be the world's most inclusive company. Much of that focus is on our own culture, but we also view inclusion in the way we impact the world. We will bring the employees, communities, dealers and suppliers who have been essential to our success in this all-electric future. It will recognize racial justice and equity with opportunity to include new green jobs. GM has joined 80 business roundtable member companies in an initiative called Multiple Pathways. It is designed to reform hiring and talent management practices by emphasizing the value of skills rather than just degrees, to improve equity, diversity and workplace culture. Our vehicle portfolio will be equally inclusive, covering all capabilities and price points so that all customers can participate. This could involve a new or a pre-owned EV or an affordable on-demand ridesharing from Cruise, our majority-owned self-driving subsidiary. My point is, to get everyone in an EV, we have to create an EV solution for everyone as we move EVs and AVs into the mainstream. You may have seen our Super Bowl ad featuring Will Ferrell in the EV-loving Norway. It was fun, but we are very serious about bringing everybody in so that we can achieve a better world we envision. This summer, the 2022 Chevrolet Bolt EUV and the redesigned Volt EV go on sale. And Chevrolet is covering the standard installation of Level 2 charging for our customers. Later this year, the GMC Hummer will launch from our transformed factory zero plant in Detroit Hamtramk Michigan. Next year, we will launch the Cadillac LYRIQ with much more to come from small crossovers to large pickups, SUVs and performance vehicles. The foundation of our upcoming EVs is our highly flexible Ultium platform. Our Ultium battery cells feature state of the art chemistry designed to reduce cobalt content by more than 70% compared to current batteries and deliver more range at less cost. We believe it's important to make our own cells and control our supply chain as EV market share grows. So beginning next year in the U.S., we will be manufacturing millions of battery cells annually in Lordstown, Ohio as part of our joint venture with LG Energy Solution. We are also working to build additional battery capacity in the U.S. [ Pushing ] ahead, we are already developing our next-gen Ultium technology and we're working with partners to ensure consumers have access to charging at home, work and on the road. I referenced our growth strategy earlier. We are taking our sustainable solutions and innovative technologies into markets that we haven't historically served. This improves the environment for all and provides opportunities for strong revenue growth. Toward that end, at the end of this year, our new business BrightDrop, which offers solutions for moving goods and services more efficiently, will begin delivering Ultium-powered electric vans. Together, BrightDrop's vehicles, EP1 electric moving pallets and connected services will provide a 0 emissions delivery solution that can also reduce congestion and improve safety in large cities. FedEx Express saw significant productivity improvements in a pilot using BrightDrop's EP1s. We expect 100 million packages will be delivered daily by 2023. So our solutions will help customers grow their businesses while meeting their own sustainability commitments. In fact, third-party research estimates that the addressable market for electric light commercial vehicle segment could be $30 billion by 2025 and double that by 2030. In addition to e-LCVs, we also see tremendous growth potential in the commercial vehicle market for our Hydrotec fuel cells. Hydrotec provides zero-emission solution for applications with heavy payloads that require rapid refueling and the ability to perform even in the harshest weather environments. Navistar, one of the leading manufacturers of semi tractors, selected Hydrotec for its production model fuel cell electric vehicle starting in 2024, and we're excited to be a part of this new business. What's happening inside our company and behind the scenes is also important to our success and our social impact. The strength of this company, and behind all of this transformation, is our people. They enthusiastically supported the company's efforts to address the shortage of ventilators and personal protective equipment at the beginning of the pandemic. I received a call from Ken Chenault, who was involved with Stop the Spread, and he connected GM to Ventec Life Systems. Within 2 days, the team traveled to Washington to 3D scan Ventec's factory. The challenge was to take Ventec, which was building about 200 to 300 ventilators a month, and scale it to 10,000 a month at a retooled GM plant in Kokomo, Indiana. Experts throughout our company, as well as our supplier partners, dove in. And driven by their strong desire to make a difference, people raised their hands to build ventilators, following in the footsteps of GM employees who have always risen to the occasion in challenging times. The team built 30,000 ventilators in just 154 days. And in my 40 years with the company, I have never been so inspired. But last year also brought a tragic national epiphany regarding ongoing racial bias and injustice in our society. The killings of unarmed black citizens, like George Floyd Jr., Breonna Taylor, Ahmaud Aubrey, Rayshard Brooks, and more in 2020, sadly followed the deaths of Eric Garner and Tamir Rice and far, far too many others. As a company, we challenged ourselves to stop asking why this continues and start asking what we are going to do about it. Because we know dialogue leads to understanding, we had difficult conversations, and we continue with our employees about their life experience with bias. We've also redoubled our commitment to maintain a workplace that is inclusive for all our employees, one that allows them to bring their true selves to work, and I am deeply and personally engaged in this part of our strategy. Diversity and inclusion are the foundation of a winning culture, offering perspective and insight that make our company better and more innovative. Within GM, we named Telva McGruder our Chief Diversity, Equity and Inclusion Officer. We also created an Inclusion Advisory Board of internal and external leaders who ensure our words are supported by our actions. To make clear our progress toward increasing diversity in the company, we will publicly release our consolidated Equal Employment Opportunity-1 report beginning this year. Employee engagement and inclusion are already tied to executive compensation, and leaders are evaluated on the progress that we make toward increasing diversity. I look at it, the Board of Directors looks at it, and we expect to see improvement. We will also be transparent about the diversity of our U.S. workforce and progress toward our aspiration to be the most inclusive company in the world. This increased transparency will help drive accountability for the targets we set. We've also designated $10 million to support organizations that promote inclusion and racial justice, with the initial $1 million going to the NAACPA Legal Defense and Education Fund. Our leadership team has also worked to enhance GM's diversity accountability reporting at board and senior leader meetings using 2 key metrics: diversity in the overall population and diversity in hiring. We're also focused on promotions, performance ratings, interview slates and attrition, among other things. Other actions we've taken include introducing a new [ equal employee ] behavior, Be Inclusive. And what it's really about is creating moments every day that value different backgrounds, opinions and ideas and opportunities where everyone can speak out. I'm here with you today because there were leaders at GM who valued and understood the importance of a diverse workforce decades ago. We are proud of our long-standing efforts to create positive, sustainable social change, including my leadership roles with the Business Roundtable. As I mentioned earlier, we are committed to widening opportunities for people to join and grow with our team. Besides multiple [ pathways ] another demonstration of our commitment is our founding membership in OneTen, a consortium of companies that have committed to create career opportunities for 1 million black Americans over the next 10 years. Most recently, we joined the gender and diversity KPI Alliance. By doing so, we pledged to use 3 key performance indicators to measure and improve diversity in our company: Percentage of representation on the General Motors Board, percentage representation by employee category and pay equality. We've been recognized by many organizations for gender equality, including the Bloomberg Gender-Equality Index and Just 100 as well as [ Equally ] which just ranked us #1 in the U.S. and 5th in the world. We have extended same-sex spousal benefits to married LGBTQ+ couples since 2012, and our strong antidiscrimination policy protects LGBTQ+ employees. As the corporate landscape continues to shift, we recognize that leading companies like ours are expected to help solve complex societal issues, and we are. We've built a framework that guides our company's internal policies, DEI, corporate giving and sustainability activities. When you add it up, it's a powerful combination. Key to all of this work is our diverse and involved Board of Directors, which is continually refreshed with skillsets relevant to our vision and our growth strategy. Effective today, we are expanding our Board with 2 new directors who will bring unique strengths and perspectives to our business. There are now 13 directors, 7 of them women and 12 who are independent. Meg Whitman joins with extensive experience in the tech sector, especially her transformational leadership at HP and eBay, as well as corporate roles at Hasbro, FTD, Stride Rite and the Walt Disney Company. And Mark Tatum, Deputy Commissioner and Chief Operating Officer for the NBA and President of the NBA Foundation, brings his strong track record of brand-building and the Foundation's work to empower black communities through employment and career advancement. Meg and Mark will be great and timely additions to a board that is already committed to elevating GM's leadership in ESG. Our Board's compensation committee factors ESG performance within our strategic goals. Linking total compensation to the achievement of these individual measures increases the focus on accountability, on efficiency and performance across the business for our sustainability initiatives. Because of our performance and strong governance, Ethisphere has recognized GM as one of the world's most ethical companies in the past 2 years. Ethisphere is a global leader in defining and advancing standards of ethical business practices. GM is the only automaker to be recognized, which signals to our customers and shareholders and business partners that General Motors is a company they can trust. So as we move to your questions, I appreciate your attention this morning. For too long, corporations took the position that ESG initiatives were incompatible with the mandate to create shareholder value. Through the efforts of the Business Roundtable, investors and others, this is changing. At General Motors, we have the talent, the technology and the financial foundation to lead our industry into a future that advances the principles of ESG while delivering growth and superior returns for our shareholders. We will continue to share our progress. Our sustainability report will be available later next month on gm.com [ and on ] our investor site. You can also learn more about everything we are doing to transform this company, and to set an example for the rest of the industry, by viewing these documents. So thank you. I hope you all stay safe, and now I'll turn it back to you, Ryan.

Great. Thanks so much for those comments, Mary. I thought that I'd start with some questions maybe around sustainability, including would be interesting to get an update on GM's goal to be carbon-neutral by 2040. It seems like you've recently accelerated some of your sustainability goals around EV transition, renewable energy, even recently, water management. Maybe you could tell us more about what's driving that acceleration in your goals? And I saw too that you've promoted 2 GM women into new roles as Chief Sustainability Officer and Chief Diversity and Inclusion Officer. I'd be interested to hear more about Kristen and tell about how they integrate into your senior leadership team and maybe helping drive some of these decisions around ESG.

Sure. Well, I'll start there because I think the appointment of both Kristen and Telva are very key. Kristen and Telva have had very strong careers at General Motors and have technical backgrounds and engineering leadership. And I think that's really critical for these roles, because both -- for both sustainability and DEI, because it's about problem-solving and finding solutions. And I know as an engineer myself, that's what they're trained to do. So -- and Kristen, as our Chief Sustainability Officer, has -- they have established a cross-functional sustainability [ office ]. And that really brings in people from all parts of the organization. So we really are taking a systems approach to make sure that we are confident that we can achieve our sustainability goals. We also, as I mentioned before, are working with NGOs, including the Environmental Defense Fund, to advocate for federal policies that really are necessary for us to achieve these targets. We're also working from a -- with the Biden Administration and other governments around the world to make sure as we invest in infrastructure, it's supporting EVs and electric AVs that are going to be so important for this transformation. As I said before, we've committed to $27 billion investment in EVs and AVs through 2025, and that was increased from $20 billion that was planned before the onset of COVID. So we really leveraged this last year after we made sure our people were safe, our consumers were safe and that we had a strong balance sheet to accelerate this transformation to AV and EV. And as I mentioned, we have our goals for renewable energy, and we just did announce a project with the Tennessee Valley Authority that will leverage a new solar farm in Kentucky to support our Bowling Green assembly plant. So I could talk a lot more about all the different things we're doing in this space, but that's just a kind of a highlight. But I hope you can see that the way we're approaching this, we're dedicating the resources, both people as well as dollars, and doing it in a way that the entire company is involved. This isn't a side project. This is a mainstream project.

Interesting. And then maybe just on the diversity, equity and inclusion front, with this renewed focus and the creation of the Inclusion Advisory Board, what does the rest of 2021 and beyond look like? And how are you engaging the leadership teams on your journey to increase diversity, equity and inclusion? And given the change that you're ushering in the auto industry and the consistent impact that GM operations have around the world, what role do you see your company and others playing in social justice and equity?

Well, I think we have a very important role to play. And you mentioned Telva in the last discussion, and to highlight, Telva is really at the key of this, and she brings great experience, not only her engineering background, but also she was the President of GM's African [ Ancestry Network ] [Technical Difficulty] Employee Resource group [ foreseeing issues ] before she took on this role as part of her engineering and -- manufacturing and engineering facilities role. So as I've said, we aspire to be the world's most inclusive company, but I want to say, I want every company to get there because that really is going to create the world that we all want to live in. We are regularly interfacing with our Inclusion Advisory Board to get an outside perspective and also to hold ourselves accountable. But we're looking very broadly and I think Telva is building a team, and she is regularly engaging not only with the senior leadership team of about 16 people, but with the top 250 leaders in the company, to really foster and drive awareness of steps that leaderships need to take, actions they need to demonstrate, to make sure everybody understands and understands diversity, inclusion and equity and what their role is in making that happen across the company. So again, it's something we're looking at broadly. We just rolled out a DEI, toolkit that we call it, to all leaders in the company. I'm actually using parts of the toolkit myself, and there's a big section on bias because everyone has bias. And so as we focus on educating people to be aware of unconscious bias, we think that's going to improve our overall awareness that will lead to more diversity and equity in the company. I would also say we continue, as I mentioned, to have conversations, and we're encouraging people to lean in and have those conversations that make them a little bit uncomfortable, because we truly believe that once you are aware of a situation, you understand it better, it will lead to change. So I mean, I would say we're really focused on the culture of the company. And we also, with our Workplace of Choice Survey that we do every other year, and in between we do Pulse Surveys, we can look at how we see first, engagement of the overall workforce, but also how inclusive people feel it is. Because our goal is to really create an environment where people can be their true self at work. Because if they're their true self, first they will be happy. If you can't be your true self, I have to think it's exhausting. How can you do your best work? So we're focused on it at really a cultural behavior level and a leadership level, and Telva is doing a phenomenal job in engaging the entire global team.

Interesting. Maybe pivoting over a little bit to the environment. It would be great to get an update on the latest with regard to your Ultium battery that was debuted a year ago. Firstly, just where do you think you are from a performance perspective, what you're trying to achieve there? And then secondly, what is your strategy to ensure supply, including as it relates to the relationship with LG Chem? And then thirdly, also, maybe you could comment on this change in battery chemistry, right, to incorporate more aluminum and less cobalt, and what implications that might have from both a cost and an ESG perspective?

Sure. Well, we've worked several years on the Ultium platform. And so right now, we are very much focused on execution because we have the launch of the GMC Hummer EV later this year and the Cadillac LYRIQ early next year. And so we'll be sharing more about those vehicles and the vehicles that will come after that shortly. The Ultium platform is a combination of a groundbreaking battery architecture, a highly flexible electrical propulsion systems and common battery cells that can be scaled across our portfolio. The Ultium platform will be capable of driving long ranges, including models that can drive GM-estimated ranges of up to 450 miles on a full charge, with 0 to 60 miles per hour acceleration in as low as 3 seconds. And battery energy storage ranging from 50 to more than 200 kilowatts. Our initial Ultium battery packs will be nearly 40% lower than those in the Chevrolet Bolt EV. And we're accelerating our development of the next-generation Ultium batteries to achieve up to 60% cost reduction from today's EVs. So we're very focused on cost because we know as we continue to take cost out of the Ultium battery, that expands the portfolio of vehicles that we can offer to customers, and we want to get a full range portfolio because we think that's going to drive EV adoption. When you talk about our relationship with LG Energy Solution, we are going to be mass producing battery cells for these vehicles I've talked about, with the joint venture that we formed in Lordstown, Ohio. And we're working, as I mentioned, on additional capacity that we'll be adding in the U.S. So stay tuned on that. Additionally, as you mentioned, we know that critical raw materials will be important in securing the battery supply. We are actively engaged in securing long-term supply of battery-grade raw materials that are produced in an ethical and sustainable manner. And we don't really see a short-term supply risk for any of the base raw materials such as lithium, nickel and cobalt. But we do anticipate the need to enhance the existing production capacity and processing technologies that are used to convert the base raw materials to battery-grade intermediates. So a lot of work going on here. We're talking to some strategic partners, really across the entire value chain, to make sure that we have secured the supply that we'll need for our very aggressive EV portfolio and our EV strategy. And we also, though, recognize the important role that governments will need to play to shape policies at the federal and state level to accelerate the development of a secure, sustainable and integrated battery value chain. And so we're participating in those discussions as well. And then lastly, to the third part of your question, we are working through the supply chain to secure the right raw materials, and we're also working -- I think this is very important -- to reduce our reliance on the materials through the new battery technologies. So we'll continue that work. And as we do that, we'll also work on reducing the weight of our battery pack and the number of internal connections, all of which allows, I think, for lower costs, frankly, it's less battery size and ease of launching new vehicles. So a lot of work to do, but we're working on all of those elements.

That's great color. It would be nice to get an update, too, on your hydrogen efforts, right? It seems that battery electric vehicles do form the backbone of your zero-emission strategy, but you've also put a lot of effort and investment over many years to developing your Hydrotec hydrogen fuel cell. So how do you think your capabilities here compare to others in the space? And what end markets do you find most interesting or applicable for this technology? And what are your thoughts on maybe how large this business could grow to over the medium or long term? And whether it is value maximized if you continue to develop the business internally with Honda, or to potentially pursue some sort of separation?

Well, we see Hydrotec fuel cells as very much a complement to our Ultium battery electric propulsion technology. And we think it's a key part of achieving our vision to get to a world with 0 emissions and an all-electric future. GM is in the advantageous position of having both its battery electric and fuel cell technologies developed in-house. And we've been working with fuel cells for 54 years and are getting ready to scale production of our Gen 2 Hydrotec fuel cell power cubes. We've increased the capability and decreased the material cost over time, with significantly less use of precious metals and allowing us to have higher power density at the same time. So this work that we've done over many years with our partnership with Honda has been very, very important. And we've also identified further cost reduction opportunities that we will see as we scale the technology for commercial use. The partnership that we just announced with Navistar, I think, is a great validation of our technology and we're active exploring other opportunities. So I think external parties coming in and saying, we're picking your fuel cell technology, because there are others on the market, is the best validation. We also see opportunities for fuel cells in many of today's diesel applications, especially those that are involved in heavy payloads, long distances, those that need fast refueling, or performance requirements, as I mentioned before, in harsh operating conditions. Cold weather is actually a benefit to fuel cell operations, unlike diesel. So applications could include commercial vehicles, aerospace, marine and backup power solutions. So again, this is an area that we see as tremendous growth for us in the future as these types of activities also work on getting to a 0 emissions future. And we also feel that we can continue to look for partnerships, and we have a great partnership with Honda, as you mentioned. And we expect to continue working very closely with their team as we develop this business. So I think it's a business that is at its infancy. We're going to continue to grow it. And I think over the long term, it can be very significant.

Great. And I did not know that about the cold weather with hydro. Maybe that's why Iceland has invested in hydrogen, I don't know, but that's interesting. And I thought to ask around Cruise, right? Because Cruise might be arguably as exciting from an ESG perspective as your efforts to eliminate emissions. Firstly, I think reducing congestion, it does benefit emissions, right? Maybe you could talk about that. And your stated philosophy that all AVs must be EVs, right? So Cruise from an emissions angle, but I'd be curious too, about any work you might have done about trying to dimension in terms of the societal benefits of Cruise, from the perspective of fewer fatalities or injuries as a result of safer-than-human driving.

Yes. So you mentioned the safety aspect of it. We very much feel that autonomous vehicles, and we're working to deliver vehicles that are safer than a human driver, will create an improvement from a safety perspective on our roads, because autonomous vehicles follow all of the traffic rules. They don't drive distracted or impaired. And research suggests that 90% of incidents or fatalities on the road are caused by human error. So we think there's a huge opportunity from a safety perspective. And safety is an important part of our culture and this strategy. So we're very excited about that. And we also, to your point, we do believe that Cruise can have a large impact, not only on reducing crashes, but also on reducing congestion, as it moves people more efficiently. So we're confident that Cruise will commercialize what we expect will be sooner than many people think. I think many people thought a couple of years ago, autonomous vehicles would be out next Tuesday, then they wrote it off for a decade. I think it's going to be happening sooner than people think. We have said from day 1 we'll be gated by safety, and we will, but I am extremely excited about the progress Cruise is making with their software development. And I think we've already shared with the world the origin, and we're ready to produce that at scale. So we're ready to launch this part of our business, which, again, I think, offers a huge opportunity for growth for General Motors shareholders and a very important business that's completely additive, and we are the majority owner of Cruise.

That's great. But just a couple of follow-ups there, including -- it sounds like you're very confident you're going to get there in terms of taking the human driver out of the equation. Any more color you could provide on time frame? I know it's always tough. But also what are the edge cases? What is the gating factor? What's the most significant problem that still needs to be resolved? Is it more on the technology side or the cost side? Or what do you think? Or the regulatory side? I don't know.

Well, I think definitely, there's -- the regulatory environment has to support this technology. And so we're actively working there. But I think the fact that we have Cruise pilot or piloting or testing vehicles without a driver in San Francisco right now, I think that shows you how far along we are in the development. And I wouldn't say it's 1 thing. I think it's just continually to advance the technology, have enough miles on the road and through all our simulations to demonstrate that we have -- we set out metrics several years ago of what we had to demonstrate to be able to take the driver out of the vehicle safely. We can continue to march up that -- those curves of the -- or hitting those milestones because we had interim milestones along the way. So I think it's just a continued development, and demonstrating that the software driving technology can handle the solutions it's going to see on the road in all cases, not just what's 98% of what you see. It's got to be able to do everything, and that's what we're demonstrating and continue to improve every day.

Great. Maybe just switching over to some other growth opportunities. I mean, you've got a lot of them, right? I mean we talked about hydrogen, we talked about Cruise and then there's the plan for 0 emission retail vehicles. What about also your more recent plans to increase your presence in the commercial vehicle market through BrightDrop? Is there anything that you'd like to highlight about your strategy there, to pursue that or other growth opportunities?

Well, I think for BrightDrop, I'm super excited about BrightDrop because we're not just saying, let's put electric light commercial vehicles out there, so change the propulsion system. We're really looking at it from a solutions perspective. And we have a very strong partnership with FedEx Express. And as they work with us to pilot some of the solutions that we'll use to make sure that we can get more efficiency. I mean, I think we've all been in dense urban environments where there is a delivery truck double- or triple-parked with packages across the street. We can do that much better. So not only can we do it with a 0 emissions vehicle, and we've clearly got the capability to do that with our Ultium platform, this does represent a growth opportunity because we haven't played that significantly in the light commercial vehicles. So this is a growth opportunity. It reduces emissions, but it actually makes the whole delivery system management of it better, which will reduce congestion. So we see it as a very, very important opportunity, and then to offer fleet management tools as well. So I think this isn't just -- I think people have to think about BrightDrop. It's not just a vehicle. It's a parcel or a goods movement solution that we're very excited about. The other one that I would mention is we've launched OnStar Insurance. And that's, I think, a very important opportunity for us from a growth perspective, because with the information we can get from the vehicle, we can really be efficient in the way we provide insurance offerings to customers. And I think it's an area where we can, I think, give a better estimate than what some of the companies are using right now by monitoring cellphones or connecting to a vehicle. So I think this is going to be another important growth opportunity. And then lastly, I'll mention on growth. We have OnStar. And when you take OnStar and then you couple that with our vehicle intelligence platform, our new electrical architecture, there's going to be other services that we can provide either when you purchase a vehicle or lease a vehicle, or when you want to have it on demand. And we're going to have that opportunity because of our over-the-air capability that we have with the new electrical architecture that we started rolling out, I believe in 2019. So we see that we're just at the beginning of offering services through our new electrical architecture, building on OnStar, that really is a brand new opportunity for growth as well.

Great. And one story that's really intrigued me and also seemingly the media and even retail investors, is just how quickly that GM has risen to become, since November of last year, the #1 seller of battery electric vehicles in China, thanks in large part to this, the market's best-selling vehicle, the Wuling Hong Guang Mini EV. What can you tell us about this highly affordable city car, which seems to contrast with a lot of the EVs on the market today, which are really quite expensive, such as those from Tesla or Audi or Porsche or even your upcoming high end GMC Hummer, EV, super truck or Cadillac LYRIQ, et cetera. What does the success of this mini EV say about who EVs are for, or which price categories we're likely to see more EVs in going forward?

Well, I think there's a lot of positives and learnings from the Hong Guang Mini EV. And I think it really represents SGMW or Wuling's capability. They have always focused on very affordable transportation serving China's Tier 2, 3 and 4 cities as well as other countries around the world. It's got an affordable price. It starts between $4,000 and $5,000. So it taps and provides a solution for that consumer base in China. But it's not just the price that's appealing to consumers, the vehicle is targeting urban young drivers. 72% of Mini's customers were born after 1990 and 60% are female. So it really is, I think, a growth and expanding where Wuling is playing. And many of the drivers are refitting their vehicles to make them unique, and there's a lot of social media buzz going on about the vehicle. In terms of future product strategy, we -- as I've said, we want to have vehicles across brands and segments and price points that everybody has an opportunity, if not having their own vehicle, then having a ride in a Cruise origin. And we also, I think, more broadly than just the Hong Guang Mini EV, we're working to shorten and reduce our product development time significantly, which will allow us to react much faster to shifts in consumer preferences. And this has all been enabled because of the LTM platform that we have developed over the last few years, and that's why we'll be able to execute so many different vehicles. But the Hong Guang Mini is something we're really proud of. And I think it really taps into the unique capability that Wuling has developed over the years, of innovating and providing offerings to customers at that type of price point for many years.

Yes, seems a great example of everybody in, right? Maybe just to finish your question on the profitability of EVs relative to internal combustion engine-powered vehicles. Is there a year by which you expect EVs to be similarly profitable? And after reaching parity, is there any thought to EVs maybe even being more profitable over the long term? So and I saw, for example, in your sustainability report, you're planning on 19 different sort of battery and drive unit configurations as part of your global EV platform, which can support all different segments. But as compares to 555 different sort of internal combustion power training combinations. Is there anything about the simpler nature of EVs that could lead to lower costs? Whether it be in the manufacturing or the warranty expense, given fewer moving parts, I don't know. What do you think are the profit implications of this shift?

Sure. Well, overall, we're targeting similar or higher margins within our EV portfolio over time. And I think clearly everyone knows, with EVs it's all about the battery, it's all about the cells. It's getting costs down, energy density up, that's going to unlock more and more of the EV market and being able to do that profitably. So that's why we are working not only the work that we're doing with LG Chem, the work we do with our own R&D and engineering teams. We do have, I think, probably one of, if not the largest, battery labs in the country, if not the world, dedicated to automotive. And so when I look at all of the work that we're doing, also partnerships with start-ups. We have a multipronged approach because it's just so important to get that battery cost down. But our goal, we stated back in 2014 that we wanted to achieve 10% margins. And so as we go through this transformation, the parity between vehicles will depend on the specifics of the vehicle, the complexity of the internal combustion engine. And let's also recognize that internal combustion engine also gets more expensive as you work to put more and more technologies on it. So the work we're doing today for not only launching the first generation of Ultium, but the second generation and even beyond, I think it's going to help us get there. And then over time, the services that we've talked about that we can put on top of a vehicle, whether it's ICE or EV, provides additional margin opportunities. So we're very excited about our trajectory for EVs. We've got to go get them out there, get scale, get the battery costs down, but we think we have road maps, and we have proven time and time again, we have the technical team to get this done. But then we think we can improve not only services but then grow in adjacencies that are -- we have a right to win, whether it's e-LCVs with BrightDrop, whether it's insurance, whether it's building on OnStar, whether it's leveraging our LTM platform and our Hydrotec fuel cells to other applications, I'm super excited about our future.

Yes, absolutely. And it looks like we are out of time. So thank you so much for the great insight that you have shared with us here today.

Ryan, thanks for the opportunity.

Absolutely. Thank you very much. Bye-bye.