General Motors Company (GM) Earnings Call Transcript & Summary

Please welcome GM Global Vice President of Investor Relations, Ashish Kohli.

Good afternoon, everyone, and welcome to General Motors' 2022 Investor Day at this beautiful venue in Hudson Yards. It's great to see so many people in the crowd and a special thank you to those that are listening via the webcast. Today's goal is to really provide more transparency. Candidly, it's something that I hear about all the time from the investment community. We are super excited to share more details on our EV journey. Not just what we've accomplished to date, but more importantly, the attractive opportunity we have over the near term. Specifically, our focus today will be on 2023 through 2025. Now before we begin our program, I want to quickly go through a few key important items. Starting with safety, which has always been and will always be the top priority at GM. So for those of you in person here, just take a minute to locate the nearest exits so that, in case there is an emergency, you can access them quickly. And speaking of safety, I'm delighted that many of you successfully completed ride and drives today, given the difficulties of navigating the streets of New York, congratulations to all of you, and hopefully, you also enjoyed the experience in one of our brand-new electric vehicles. Note are forward-looking statements, which, to be honest, I'm sure many of you have in your memory. The one thing I would say, I don't know about you, but every time I look at this slide, it seems like the font just gets smaller and smaller. So kudos to our world-class legal team. But all kidding aside, this is actually a really important slide because it governs everything that's going to be disclosed today, not just the presentations but also during the Q&A. In addition, please see our disclosure on the technologies and the vehicles that you'll see today, including the beautiful Cadillac CELESTIQ and the Chevrolet Blazer EV that are here in the room. Now for those of you that are joining us in person, we will be sharing sensitive product information, and we would really appreciate it if you would refrain from taking any photography. And lastly, I'll also note our statement on non-GAAP financial measures. Now let me quickly walk you through the agenda for today. So Mary is going to come on after me and provide some opening comments. She'll be followed by Mark, who will go over our impressive portfolio of new vehicles as well as an update on our go-to-market strategy, a topic that I know is near and dear to many of your hearts. He'll be followed by Doug, who will talk about 2 of our key competitive advantages, notably our Ultium platform and our supply chain team. Travis will then share some impressive progress on BrightDrop. We will then take a 20-minute break, and you'll need it because after that, you have Paul coming to provide some financial summaries over '23 through '25. After that, we've allotted about an hour for Q&A, which I know from my prior life is one of the most valuable elements of an investor event. So with that, let's get started.

Welcome the Chair and CEO of General Motors, Mary Barra.

Well, thank you, everyone. Good afternoon, and welcome. I am really glad that you're here today. I hope all of you were able to spend some time in our new products, including the Cadillac LYRIQ, the GMC HUMMER EV, the BrightDrop van, and I hope you've got a chance to really experience the vehicles because I believe even a short ride and drive is enough to appreciate how much deeper we've gone with the Ultium platform than simply replacing gas engines with batteries are replacing our ICE portfolio with EVs. We have developed the LYRIQ and the HUMMER EV, along with the entire portfolio of vehicles that are purpose-built to BEVs. They're already amazing customers. I'm sure you had some people having interest as you were driving around the streets of New York. And we believe with each new vehicle that we roll out, we will continue to amaze customers and trigger the fastest period of transformation and growth that I have seen in my GM career. Everything you will see today are the results of a multiyear strategy that is now well timed with today's inflection point in EV demand. If you think about it in just the last 5 years, U.S. consumer interest in EVs has grown 110%. And independent forecasters now see EV adoption rising to 17% of industry sales by 2025. Now at General Motors, we're planning for even higher penetration because customers, we believe in every major segment, from a retail and a fleet perspective, are increasingly ready to go all electric. Our brands, our dealers and the Ultium Charge 360 network will be there ready to meet that demand. So think for a moment, consider we have the largest vehicle park in North America and the highest customer loyalty. This is a built-in advantage now with so many customers that are ready to move to EVs. Our broad portfolio will help us conquest significant numbers of customers from rival, ICE and EV brands, especially in the coastal states. In fact, we expect GM will be one of the fastest-growing OEMs in California, New York, Florida over the next several years as we rapidly scale our EV portfolio. And we're uniquely positioned with a broad product portfolio and scale to accelerate the electrification of commercial, government and daily rental fleets as well. And by mid-decade, the Ultium Charge 360 network will include more than 5,000 DC fast chargers, including the ones we are installing on thousands of miles of U.S. highways and in metropolitan markets with EVgo and Pilot Flying J. We're also working with our dealers to install 40,000 Level 2 charging stalls in communities across the U.S. and Canada. And that's on top of other GM public and private charging initiatives. In every EV segment we enter, we're delivering new, distinctive and incredibly exciting vehicles. We have multiple entries targeting the most popular pickup, luxury and SUV segments, and we plan to scale quickly due to the inherent flexibility and the efficiency of Ultium. And we expect our EV portfolio will be profitable in 2025, including projected greenhouse gas benefits and revenues from software and after sales. And this is before the benefits of the new clean energy tax credits. When we factor that in, we believe by 2025, we will be executing a portfolio that has got the same margin profile as our ICE portfolio, and that's by 2025. Our ability to grow EV sales profitably is the payoff from many years of investment in R&D, in design and engineering, manufacturing, our supply chain and a new EV customer experience that is designed to be the best in industry. And all of this reflects the incredible leverage we have with the Ultium platform to continuously improve battery performance and costs. It's a transformation made possible by the structural improvements we have made over the last several years. We have focused on our most profitable regions. We've reduced complexity, and we've improved vehicle profitability by having great products. And we've also reorganized General Motors and our teams for the future. We then began investing in the savings to diversify our revenue streams to further improve our margin. So if you see about the journey that we've been on, Phase 1 was to focus on the development of the Ultium platform and then the Ultifi platform and both underpin our EVs and our software-defined vehicles. Phase 2 is when we capitalize on Ultium to rapidly scale EVs while leveraging our leadership in key ICE segments to maintain strong company-wide margins. Phase 2 is the period that covers '23 through '25. Phase 3 will take us to 2030 and the targets we outlined at last year's Investor Day, including company margins that we expect to grow 12% to 14% by the end of the decade, those still hold. And this is when our enterprise momentum in EVs, in Cruise and software-defined vehicles and the new businesses that we've invested in will truly create a flywheel effect. Now Cruise continues to make rapid progress since the Open House in September. And with the recent developments at competitors, I don't think there's any longer much of a debate on the fact that Cruise is in a leadership position in EVs. Cruise recently began conducting driverless rides with employees during daylight hours in San Francisco, and they are on track. I talked to Kyle earlier in the week to launch commercial operations in Phoenix and Austin by the end of the year. And I hope many of you have had a chance to really take a ride in a driverless cruise vehicle because so many people talk about the fear that they will have. But once you're in that vehicle for 2, 3, 4 minutes, that's all it takes to have confidence in the technology of that vehicle, the performance of the ride, the smoothness of the ride and the overall safeness of the ride. It is truly an experience. I can tell you, we, at General Motors are incredibly proud of how fast they are moving to commercialize and scale and reach the goal that they have set for $1 billion in annual revenue also by 2025. We also plan to deep dive our software-defined vehicle strategy with you in the first half of 2023. If you think about it, we have long been a connectivity leader with OnStar. We were the first OEM to broadly deploy 4G LTE WiFi. Super Cruise is widely considered to be the best advanced driver assistance system on the market whether you're measuring based on safety, capability or miles of available roads. And with Ultifi, we can now send over-the-air updates to nearly every vehicle control module. But the future for GM is about having a software-first mindset because that's how we'll drive a faster cycle of innovation and take the customer experience to all new levels while operating more efficiently across the entire enterprise. As we are in the midst of this transformation to a software-centric company. What's been interesting is that 70% of the talent is choosing to join us, and they're coming from big tech and nonautomotive. We are attracting thousands of the best software talent out there because they're excited to be part of General Motors transformation and help create a world with 0 crashes, 0 congestion -- excuse me, 0 crashes, 0 emission and 0 congestion. So we look forward to taking you deeper into our strategy next year, and that will include updates on Ultifi. But today, our focus is on Ultium and accelerating our EV momentum. Let's start with great products and great customer experiences. We, along with our dealers, already deliver on both fronts. Our ICE portfolio in North America is highly profitable and supported by great quality and consistently high scores for customer satisfaction with dealer sales and service. It's a multi-brand, multi-segment multi-price point success story. For example, Chevrolet and GMC combined have been the full-size pickup leader since we unseated the Ford F-Series in 2020, and we've led in the full-size SUVs for 22 years. GM has grown to be the most successful premium truck and SUV brand in the industry, and by the way, it's a high-volume business as well. Denali retail sales alone are about 100,000 units year-to-date with higher ATPs than Mercedes-Benz, Jaguar and BMW. Buick is the highest ranking brand in overall initial quality according to J.D. Power, and Chevrolet is third with 6 models ranked at the top of their respective segments. And the Cadillac Escalade, BlackWings and the V-Series are earning increasingly younger and affluent customers from global luxury brands by setting new expectations for performance, technology and sophistication. Now we are applying the power of our brands to EVs, while continuing to invest in key ICE segments. Today, you're going to see the freedom Ultium gives our designers and our engineers. You've seen it a little bit already. This includes a new design vision for Buick and bespoke work of art like the Cadillac CELESTIQ. But I want you to pay particular attention to the Cadillac LYRIQ, the Chevrolet Equinox EV, the Blazer EV, the Silverado EV and the GMC Sierra EV. These products are so important because they're core to our critical and critical to our EV growth strategy through 2025 and the buzz they are creating is already incredible. Reaction like these are building pent-up demand, which is further evidence that our multi-brand, multi-segment, multi-price point EV strategy is right for the retail market. After 3 consecutive quarters of growth, we had to cap GMC Hummer EV reservations at 90,000 because demand covers at least the next 2 years of production. Now 70% of these customers are buying their first EV and 75% are new to GMC and 40% are new to General Motors. At Cadillac, 78% of the orders for the LYRIQ are from customers new to the brand and nearly 2/3 are Gen X and Y, and we're over-indexing in the Western region, 40% are also new to GM and nearly 1/2 of the Silverado EV reservation holders are new to GM. So stop and think about that for a minute. Think about how powerful that is. We're a company with the highest loyalty in the industry, and we are poised to conquest at 40% or better as we scale these beautiful EVs. The Equinox EV, the Blazer EV and the Sierra EV will only add to this momentum. We've had more than 0.25 million combined hand raisers for the Equinox EV and Blazer EV with significant interest on the West Coast. And initial reservations for the Sierra EV Denali Edition 1 were filled in less than 15 minutes. GMC already has a waitlist of close to 20,000 customers, and that's growing every day. And our strategy is right for the fleet market, too. The ongoing transformation of our fleet business is simply remarkable. Now many of you know, for a long time, we used fleet sales to support higher production volume, and we accepted lower profitability. That began to change as the appeal and the quality of our products improved over the last decade. We have gained significant market share with commercial customers, and we have greatly improved the profitability of our commercial, government and daily rental sales across the board, especially in recent years. Now with the Ultium platform, we can grow fleet share with margins comparable to retail deliveries. Hertz plan to order up to 175,000 EVs from GM over the next 5 years is just the start of a wave of fleet electrification. And GM's strong and long-standing relationships with fleet customers are an incredible asset that separates us from EV start-ups. And the breadth of our EV portfolio is aligned to customers' needs far better than our competitors' limited offerings. So this means GM fleet customers can move to faster to electrify, especially when the new federal incentives are in place. Chevrolet is well positioned with the Equinox, the Silverado and the Blazer EVs while BrightDrop's multibillion dollar opportunities in last-mile delivery and online grocery are pure upside. Travis will share more in a few minutes. I can say with certainty that we would never have been able to develop so many outstanding and unique products if they were all ICE retrofits or hybrid programs. The complexity and the cost would have made it unworkable, but that's what's so special about Ultium. The common set of batteries and components and a single flexible platform, we believe, we can scale quickly and cost effectively to more than 1 million units of annual capacity in North America by 2025 and then we are just going to accelerate from there. With the capacity we're installing in China, we'll be able to produce more than 2 million EVs globally in 2025. So clearly, there is a lot coming between now and 2025, including next-generation ICE products and our dealers will be ready. Over the last 3 years, we have partnered with them to deliver the industry's best customer experience and a better business for ICE, but especially for EVs. And we've worked with our dealers to reimagine every aspect of the sales service and parts network including how our customers shop, how we manage inventory and how we importantly support the vehicle after the sale. Mark will go into detail on the benefits to our customers, our dealers, and GM with these changes. Now the flexibility we've designed into the Ultium at the cell module pack and plant levels is fundamental to unlocking the profitability of EVs. And Doug's team has done an incredible job, and he's going to show you how it all comes together through R&D, engineering, our supply chain and our manufacturing strategy. As you know, our first Ultium cell plant is open now and 2 more will open by the end of '24, which makes us a clear leader in domestic cell manufacturing capability. Our supply chain team has already secured binding commitments covering all of the battery raw materials we need to fill our projected capacity demands. And we continue to secure our future beyond 2025 with strategic supply agreements and direct investments in natural resource recovery, processing and recycling. We're also doing some exciting work to further boost the energy density of our cells to further reduce cost. It's all vertically integrated and aligned to support growth, profits and speed. Finally, Paul will tie everything together with KPIs that show how we are driving returns on our investments before the impact of the new clean energy tax credits, as I said earlier, and with them the ability to deliver ICE-like margins. We look forward to the publication of the final rules, but it's clear these credits are going to help usher in a new era of technology innovation and job creation that's going to achieve what was intended, and it will be good for the American economy. It will be good for American families. It will be good for the environment, and frankly, General Motors is well poised. Specifically, the credits will support our continued investments in EV technology. They will enable us to continue to strategically increase our supply chain and manufacturing footprint domestically and with free trade agreement partners, and they will help us introduce millions of customers to the game-changing benefits of our EVs. We believe we are better positioned than nearly all of our competitors because we're so far along on the journey in every respect, and we are very proud to help lead this charge. As I said at the beginning of my remarks, we are about to begin the fastest period of change in growth that I've seen in my career at General Motors. This is our moment, and you are about to see how we will seize it. So it all begins with great vehicles and customer experiences. So I'm now going to turn the floor over to Mark to show you what we have in store, and they will literally be in store, and I'll be back for Q&A. So Mark?

It's pretty exciting, and thank you for being here today this afternoon. And as Mary said, I'll be taking you through the portfolio strategy, which is really designed to efficiently capitalize on EV growth opportunities. And we'll be giving you a look, a very fun look, at some of our upcoming vehicles in the near term. And I'll tell you why we have the best and deepest roster of vehicles on the market. Mary is spot on when she says, we will compete for nearly every EV customer using Ultium's common set of battery components, a single flexible platform and scale. And Doug Parks will elaborate on that in just a moment. So every product we launch next year and in the years to come, whether ICE or EV will be a world-class vehicle designed to take on the best in the industry and what they have to offer and win all of them, and that's how we're going to grow the business. On the ICE side, this is critical because the profits from these vehicles and the rest of our ICE lineup are literally funding our future. And as we accelerate investment in EVs and the software-defined vehicle, these ICE vehicles are critically important. Our ICE vehicle portfolio is incredibly high demand and helping us generate record profits to invest in an all-electric future. Paul will discuss the financial specifics later, but I want to point out that to sustain and build that demand, we are refreshing key ICE vehicles as we transition. To illustrate the demand for our ICE portfolio, here are some numbers through Q3. GM retail market share is up 0.7 points over last year. GM retail market share is growing in the ICE dominated segments where we already lead all other OEMs based on J.D. Power PIN calendar year-to-date through Q3 '22. For instance, large pickups, up nearly 3 points with our HD pickups taking nearly 52% of the HD market share in October and nearly 49% calendar year-to-date. In fact, J.D. Power PIN shows September Silverado HD with a lead over Ford F-Series HD in retail market share. Large SUVs retail share up more than 0.5 point and large luxury SUVs up 3.2%. So looking ahead, we expect our truck leadership to continue as we electrify our truck fleet, with trucks like the Silverado EV and Sierra EV adding additional sales on top of our already market-leading ICE truck portfolio. These pickups will bring unprecedented capability. They're not just electric pickups. They're outstanding, high-performing pickups that happen to be electric. We've been testing Silverado EV, for example, and the results are really off the charts. Here's a peek at some of the numbers: range, 400 miles of GMSA range on a full charge; charge rate, 350-kilowatt DC fast charge capable and that's about 100 miles in 10 minutes; 754-horsepower and 785-foot pounds of torque; towing capacity, matches our current ICE model up to 20,000 pounds for the work truck model. Our EV success story goes beyond trucks and extends to the heart of the high-volume market with strong performance from the Chevy Bolt EV and the Bolt EUV. That Bolt family has had its best quarterly total sales ever in Q3 2022 selling 14,709 units, and for the calendar year through October, the Bolt family has sold more than 27,000 units, up 9.3% over last year. Now the Bolt EUV is now the #1 mainstream EV or non-luxury EV in the market today. In response to this very strong customer demand, we will increase calendar year production for global markets from approximately 44,000 units in 2022 to more than 70,000 units in 2023. That's a big change. So as we move into our next year and beyond, our EV portfolio will span a wide variety of segments and price points, thanks to Ultium. We are selling a record number of Bolts right now -- and on the other end of the market, as you may have driven outside our HUMMER EVs are fully reserved, and I have everything in between that. We have the platform, the scale and the resources to be able to serve a wider market than anyone else. And we'll do it while driving improved margins over the long term, thanks to the scale and versatility afforded us by Ultium. We'll be in the key high-volume segments with purpose-built electric vehicles that are stylish, attractive and full of the content that our customers want. And that's why we're placing such an emphasis on beautiful design. None of this happens unless we make cars that look great, inside and out, that people would love and want to buy. The desirability is very key. And as we broaden our portfolio, we'll be in the right in the right segments at the right time, and you'll see that in a moment, including the high-volume crossover segment this next year. In fact, in just the next 18 months, we'll be entering a remarkable variety of segments more than what have ever been possible in the ICE age. And the quality of those segments is very important. These aren't niche segments. By 2025, we'll have EVs in about 1/3 of the segments, representing nearly 70% of the U.S. industry by volume, and we will just grow from there. We'll have a portfolio that positions us to continue to lead in full-size trucks and SUVs and those are the most profitable portion of the market, obviously. Some have wondered why we'll be in so many segments, and they wonder if the smarter play is to focus on a more limited number of models and a limited number of segments. The answer to that, people want choices and offering many different choices can meet the needs of many different customers. We see strong EV demand in all segments of the market, and people don't want to leave their segment to go electric. This is how a century ago GM took the leadership position in this industry by offering more choices than the competition with vehicles that were beautiful, highly styled and very desirable. In fact, if you go back to that point, GM actually invented vehicle styling and design. It was called the color and trim department back then, and we led the industry by offering beautiful design. We also invented customer research back then. And you can see we've done our homework for what we're doing here as we transform the company. And this is the same way we're going to win in EVs with beautiful vehicles and a broad array of segments and price points for our customers. And as we do that, we'll be ramping up to a full production much more quickly than we're doing with our current production models like the LYRIQ and HUMMER for instance, mostly because of the applied learnings from these current launches. As we gain more experience with the Ultium platform, we can convert plants for production of new models with increasing speed. For example, converting Factory ZERO took about 20 months. For CAMI and Orion, it will be in a range of 7 to 12 months. It's a big change. I'd also say the same for our cell plants. Our first cell plant is now online in Lordstown, Ohio. As we ramp that, those plants are identical. In fact, the launch team is from Spring Hill. Our second plant are in Lordstown today, and we'll be able to scale those cell plants very quickly as well. So earlier this year, we showed 4 high-volume electric trucks and SUVs that target America's most popular segments: the Chevrolet Equinox EV; the Chevrolet Blazer EV, as you see over today; the Chevrolet Silverado EV, as you saw in the patio and the GMC Sierra EV, which you also saw in the patio. These 4 products launch next year or early '24, in the case of the Sierra EV, and they will scale in 2024. And by 2025, we are planning annual volumes of more than 600,000 for these 4 nameplates. That's just the beginning. We'll also be launching additional EVs for Cadillac, Buick and BrightDrop by 2025. This is how we will use the 1 million units of annual capacity we are installing in North America by 2025. So with that, I'm going to give you a great look at what we have in our pipeline. And some of those vehicles that we'll launch between now and then and some that you have never heard of or seen before as well. So starting with calendar year '23 ICE. All right. This is the Chevrolet Montana. This is our Brazil compact pickup truck. This is beginning to launch right now. People are very excited, but very important for us for that South American Brazil market. The Chevrolet Colorado, this starts production very soon. In fact, we were down in the plant here a couple of weeks ago looking at this and the Canyon. But these 2 trucks are going to be very strong in a very competitive midsize truck market. If you remember, everybody called us crazy for going back into the midsized car and truck market here a few years ago. Millions of trucks later, we are doing extremely well with that. If you look at the GMC Canyon, also part of that, these are the most differentiated midsized trucks between GMC and Chevrolet that we've ever done, and you'll see some of those interiors in a few minutes as well. Extremely fun and extremely important for us. This is a small Cadillac SUV for China only, the Cadillac GT4. This is a very strong entry point here for us for Cadillac, very important market for us in China. So very exciting. The Cadillac CT6, also China only. If you remember, we had this in the United States for a while, but we had to convert Factory ZERO to all the products that we have from an EV and autonomous vehicle standpoint, very popular car still in China. It's a very beautiful car. So redoing that, inside and out, styling-wise. The Buick Cross, and this is China only as well. This is a very high-volume market. It also previews the wildcat styling that you saw on the show car for the future of Buick design. So a beautiful car for China. And then we have this, this is the Chevrolet Electrified C8 Corvette. I spoke about this earlier. This comes here this next year, obviously, 2023. And I'd tell you what this is after the basis of C8 and then on top of that Z06 with the most powerful naturally aspirated flat-plane crank V8 ever. This is the next springboard for the C8 platform. So we're very, very excited about this, obviously. The Chevrolet Traverse, a nice enhancement for this, very popular. Obviously, 3-row vehicle, high volume, right in the heart of the market here right below the Tahoe in terms of size but very much more truck-like here as we introduced the refresh of that. Buick Avista. This is U.S. It's already in production in China. Again, the plane forward of the Buick design off of the wildcat, beautiful vehicle, getting ready for the U.S. here as well, just a beautiful addition to the Buick lineup. Chevrolet Trax. This is something that we're getting ready to launch here, obviously, and this is about a $19,000 price point that is profitable. This is probably, in my career, maybe beyond that, the finest entry-level Chevrolet that this company and, I think, the market has seen in many years. So drove it the other day, incredibly useful but also very youthful. It's sort of a white space for us. It's not really an SUV or a car, but our dealers are extremely excited about this in high volume in that part of the market for us as an entry-level Chevrolet. With that, I'll move in to -- as you can see in 2023, we've got a busy year on ICE vehicles and then we'll move into 2024 here and talk about what we have coming from an ICE standpoint here. So alongside of the Traverse, we'll move the GMC Acadia to a little bit different size standpoint. So this comes in a little bigger than the old Acadia. So it's a big transformation for GMC and as part of the market. And again, very handsome, very much GMC truck premium. It's really just a professional grade SUV in this 3-row category for us. Chevrolet Equinox. This is the big redo of our popular ICE Equinox that we have today in the biggest segment of the world. This is right in the heart in the market. Again, this is a major redo for us here. So we're very excited about it as the biggest segment in the world gets a new Equinox. So high volume, much more profitable than the old one because it's a second lap of the architecture. So this is a big deal for us. And this is why we do things like this. We set it up and we just really sweat the assets on something like this. Cadillac XT5. This is for China only as we move Cadillac in the United States through an all-electric brand. The XT5 is still a very high volume segment in China, and we're going to do that with a new design language interpretation both inside and out for China for XT5. Buick Enclave, this is the flagship. Again, the third entry in the C1 architecture, which you might not know what that is, but it's again, it's our 3-row made in Lansing, very profitable for us and Buick's flagship for now in the family of luxury-type SUV segment. And again, the new design language for Buick as well as the new badging, which you've seen here over the last few months. And then we have this. This, again, is the next step in performance for Chevrolet. This is one of the most exciting cars Chevrolet has ever produced. And I got to tell you, as an enthusiast, this is just incredible. So again, building on the incredible platform of C8, the next extension of that, and we couldn't be more excited. So this is really -- as C8 was designed as an early architecture, we keep stepping it up. So this will again set the standard of the world for performance for Chevrolet, and I couldn't be more excited for that. GMC Terrain. This is again in the Equinox largest segment in the world. Terrain gets sort of the GMC professional-grade upgrade for this. And I got to tell you, this is one of the most beautiful SUVs in that segment, very -- again, very GMC, very truck, very professional grade. So a big interior and exterior enhancement for the Terrain. And then we're not done yet. This is again the next version of C8 at the very top of the line. So this is something that you won't be able to imagine from a performance standpoint. Again, we will put the world on notice with this car. And again, it's our engineering platform of excellence from a performance standpoint. So this is the reflection of what GM can really do. So again, we're really excited about that, obviously. So let's look at some of the ICE vehicles that help us invest in the future of EVs, and that's our calendar year lineup, many of which I'd like to show you right now. So let's get into the '23 EV portfolio. All right. So starting with BrightDrop. You got to drive that today. How cool is that? I kind of want a BrightDrop van. I don't know why. But how cool is that, right? When is the last time you got an opportunity to drive an all-electric van with -- that is so focused on design around our drivers that deliver things. And I'm very proud of the team and Travis will tell you about that, but we'll ramp up production here at a higher output facility in CAMI, and that's a very exciting thing for us because we've got a ton of customers for it, and Travis will detail that. The HUMMER SUV, you saw it out on the patio there in its launch color, which is a beautiful green. This vehicle drives quite a bit different than the SUT because of the wheelbase change. And so we'll also offer some things that are a little bit different on the lighter side of off-roading in the SUV variant. And I got to tell you, this is a wider -- a little wider audience from an appeal and drivability standpoint. So a big deal for HUMMER SUV. And then Buick, we will bring back the electro name. No, it's not a Deuce and a Quarter, don't think that. If you remember that, I'm old, but I do. But we're bringing back the electric name because it's fun. It's cool as we electrify Buick. And that's in China in '23 and the U.S. that are in '24. So as we electrify Buick, we've got an opportunity to really change the way people think about it and appeal to a whole new group of people. You saw this on the patio as well, and you've seen it launched. You saw the Sopranos add probably last year in the Super Bowl. This is our ground-up truck. This is not a truck that has put batteries back into it. We can do things like mid-gates, we can do MultiPro gates. We can do all kinds of things like 4-wheel steering. This is the pinnacle of innovation. And as Mary gave some of the stats on who it appeals to, it's half -- 50% of people who haven't bought our trucks before. So very exciting for Chevrolet, high volume. Factory ZERO is getting ready to ramp up here. So the team is retooling, Gerald's team is retooling. So very exciting time in Factory ZERO as we get to launch more vehicles and more volume as we ramp up. Cruise Origin. We're going to beat a bunch of people in the market here with technology and a mass-produced, purpose-built EV. And so Mary and I and others, a whole bunch of people now are riding in the daylight and taking Cruise driverless rides. It's really quite an experience. And so this takes all the customer and data input from everything we've done with Cruise on the streets of San Francisco and done it and put it into a purpose-built design vehicle. So this is very exciting for us, too. And we will and we are leading in Cruise EV. You see it over here, the Chevrolet Blazer in a different color here. This is -- I actually own an ICE Blazer for my 18-year-old. This is a great vehicle in ICE form. This is even another step in performance and design for the EV. So they will coexist for a little bit, but I got to tell you, this is an incredible performance vehicle, but it's also an incredible design and something that, frankly, no one else has. So I'm very proud of that, and it's right at the heart of the market right around $45,000. The Buick Electra E4. This is for China only, and again, beneath the E5, but a beautiful vehicle for China. China, as you know, is rapidly as a market accelerating the electric transformation, and so we'll be ready here with Buick, which is a great nameplate both here and in China. Chevrolet Equinox EV, Mary showed this, and you've seen it. We're getting ready to ramp this up around $30,000. This is right, again, just like Blazer, right in that heart of the market, and it's gorgeous. So this means that we're going to offer people something that is highly desirable from a design and execution standpoint right at people that can use an electric vehicle as their only vehicle and not just the people at the higher price points, doing it as an extra vehicle. So this is a big deal, and it opens the door and takes away the friction points for a lot of people in high volume. And this, this is a Cadillac compact SUV. As we get ready to go all electric in Cadillac, Cadillac will lead the way in terms of technology and segments and price points and luxury. And so again, new technology, new design form and new cars for Cadillac in these segments. So it's very exciting. And then speaking of exciting new cars and new segments for Cadillac, the CELESTIQ. The CELESTIQ is something this company hasn't done in my career, hasn't done for a long, long time. In fact, I hope you got a chance to go out in the gallery and see the reimagining and redesign of the goddess, which makes us a return into these cars for the first time since 1959. This car is hand-built. It is bespoke. If you saw any of this, Lenny Kravitz is actually doing his car right now. I think he's probably going to put a guitar string in the center console of it. You can do anything from that to flowers from your garden, laminate it into the door panels. Over 100 pieces are additive manufactured in this car and 4-wheel steering the whole deal. It has a [indiscernible] bigger than anything that I've ever seen done. And so this is the pinnacle of Cadillac, bringing it back to the standard of the world. We can't wait. The demand is there, and we couldn't be prouder as a company but also our employees. This is a big deal internally. It's just -- it's everything that we know how to do from a technology, design and bringing back Cadillac to the standard of the world. And that's what we're doing with it, a true brand statement. So again, all of those EVs I just showed you will be in production next year. That's what Ultium shows us to do. And that's -- the following year of '24, there's even another complete lineup of EV. So let's take a look at those. GMC Sierra EV, you saw it on the patio out there. This is again a little bit more truck-like proportion and design and that's by design. These 2 are very different from Silverado to Sierra and the pinnacle of Denali is what you're looking at right here. So Mary went over some of the Denali statistics. They are fantastic, by the way, in high volume on APPs and volume. And this is sort of the pinnacle as we bring in a new Denali and a new face of GMC, and that's the way we're using it. And then there's this. This is a full-size Cadillac electric EV, SUV. And you can imagine what this competes with and where it competes, but it is -- again, this will be a pinnacle of design and execution. Some of the things we learned on CELESTIQ will find their way into these vehicles, which I think is going to wow the world once again, even after the Escalade that we sell today, even in V form. So there's some great things happening here. And then there's this, so you can imagine the wheel-base differences we have today and the size-base different things that we have today on our full-size SUVs, we're going to do it again in a much more innovative way though. So you're going to see things here, design, size, platform sharing-wise, but also technology-wise, they'll be very different than the way we execute today. So very exciting for us, and we're pretty much finished with the design and going and preparing for production. The Buick GL8 and this one is really -- the GL8 in China for Buick has really been a hit for many, many years. So now we electrify that. And of course, this is used for carrying people but also executives. So we've got a great vision of what we're doing there, and I think it's going to be very, very successful in China. And this one, this one is coming a little bit later, and this is the Chevrolet version of it. It's a [indiscernible] primarily for the Chinese market. And we'll see the desirability as we clinic this. This is a little bit further out, but this is a pretty dramatic low-roof sedan-like proportion that we're just beginning to design an engineer. So it's really quite a statement from a design standpoint, but we'll see how it goes. So that sums up our calendar year '24 EV portfolio, and they're just dynamite. And by the way, our product portfolio is as beautiful on the inside as it is on the outside, as you can see. So that's a look at what we have coming in the near term plus a sneak peek into the future. Now I'd like to talk about how we're going to put all these vehicles in the hands and the hearts of our customers through our revamped retail process, which includes our outstanding dealer network. We are leveraging our dealership network for the competitive advantage that it is, and we're going to take out some of the cost of selling a vehicle to the tune of about $2,000 per vehicle. Now about 90% of the U.S. population lives within 10 miles of a GM dealer, which gives us an unmatched network proximity for the customer sales and service experience for which our dealers are highly rated by J.D. Power. And by the way, our GM dealer network is one of the most diverse and inclusive networks in the industry today. GM was the first OEM to have a minority dealer council established in 1972, and this year is the program's 50th anniversary. We have 317 dealers represented through Q3. In 2021, these dealers sold more than 183,000 vehicles, and they earned $17 billion in sales. Our dealers are community assets and they provide significant contribution to local taxes, employment and philanthropy. They are well positioned for success in both selling and servicing electric vehicles and are experienced in doing so going back to the original Chevrolet Volt and continuing through the Bolt EV and EUV. They have worked with us to invest in charging solutions and have an army of knowledgeable EV specialists, along with comprehensive customer service and experience standards and training solutions. In short, our dealers are ready for this, and like us, they're getting better every single day. We support them and they support us because we both have the same goal, satisfy every customer and foster customer loyalty. They also support us in the transformation of our dealer's strategy in collaboration with Tekion to execute the GM Digital Retail Platform, or DRP, as we call it, which is a world-class end-to-end retailing platform already in market. Chevy Bolt's used vehicles are all currently transacting on our DRP and expansion to additional products is accelerating and will start with Cadillac in 2023. DRP provides transparent, VIN-level pricing, with full F&I menu integration. Like our new approach to the used car market, CarBravo, our digital retail platform, enables a true omnichannel shopping experience, enabling customers to transact 100% online, 100% in the dealership and all points in between. We call that By Your Way. It also enables some automation, which we'll expect to help dealer deliver cost savings opportunities and overhead, administration, IT and data services. We have about 3,200 dealers enrolled beginning in their engagement with the DRP. This represents about 80% of the total network, and that includes more than 90% of the participating Chevrolet dealers. What's amazing is recent expert assessment by J.D. Power ranked Chevy EV as the most complete end-to-end digital shopping and buying experience and among all of EV competitors, including the direct sellers in market today. So we are ranked #1 with what we're doing with the Bolt and then how we bring it online with CarBravo and then Cadillac in 2023. So we have something that's gone very, very well. We've also launched new inventory management processes, including centralized EV fulfillment centers. That enables faster order delivery timing and lean inventory management. Three centers are open, 2 servicing California and a third in the southeast. And these fulfillment centers will be stacked with fast-turning products, enabling faster order delivery times in our GM dealerships and a lower enterprise inventory cost. Through this centers, we can deliver the exact configuration of customer orders in as little as 4 days. By contrast, we believe the same process will take some other OEMs 6 to 8 weeks. That's why these regional fulfillment centers will be a huge competitive advantage for us. And by the way, the profit improvement opportunity here for both GM and our dealers is sharply to reduce the SG&A and those distribution costs. The biggest enterprise-wide cost savings will come as we and the dealers change how we handle inventory, which means we're reducing how much we're standing and stranding or incentivizing vehicles that were ordered that aren't popular. At the same time, we'll prove the customer experience by delivering the exact vehicles our customers want quickly and efficiently. So here's how it will work. Dealers will still hold physical inventory for EV test drives and immediate delivery as they've always done. But these stocks will be complemented by GM-owned inventory housed at our regional fulfillment centers. So we'll use cloud data and machine learning to continuously scan the order pipeline and available dealer and factory inventory for the best fulfillment option. We know how this works because we know what vehicles move in certain parts of the country and at certain dealerships. So the bottom line of all this, and that's thanks to reduced complexity, efficiency and inventory management as well as top-class technology, this will translate into that $2,000 per unit in efficiencies and cost reductions for GM. That's a big deal. So at the same time, we'll be increasing the revenue opportunities by selling high-margin products and services, including OnStar, a host of digital services, vehicle financing through GM Financial, extremely important, parts and accessories, insurance and a lot, lot more. Our dealers are exceptionally well equipped to do this, and we'll win customer loyalty with the service our dealerships provide them. Superior service strongly neighbored in the dealership model is not easily duplicated by direct sellers. Our customers know this, both ICE and EV customers, and by the way, so do our other people's customers, our competitors. Since 2021, our dealers took repair orders on vehicles whose make or model was listed as Tesla more than 11,000 times. That's a growing business for us. I got to say, it's a new business, which is great. Those customers brought their vehicles to us for service because they know, we know, and we have the expertise to fix them. They know that we have the customer service experience that they also want and they know that we have the service base and the dealerships in place. This is why Tesla is now investing millions to replicate the brick-and-mortar service centers we already have. In fact, they're actually locating some of those close to where we are, which is okay, but we're there. A lot of their customers are coming to our dealerships which I said are within 10 miles of about 90% of all Americans where they will be exposed to our beautifully designed, high-tech product portfolio. So when they go into those service base, they're going to see our portfolio that I just showed you, and that's a big deal for us as well. So finally, I'd just like to say one thing in conclusion. It's something I tell people a lot. Do not bet against this company. We have been preparing for this for 3-plus years. We put this plan in place and we have changed our strategy. We've only accelerated it as you've seen. As Mary said, the first phase was a 3-year process of investing in the developing new strategies, new ideas and new platforms like Ultium and Ultifi. Phase 2 is happening over the next 3 years, where we'll see rapid volume growth that provide us the scale necessary to significantly bring down costs and catapult us into the third phase. We will receive even more volume and margin growth as well as contribution from our high-margin software businesses. As the EV market expands, we'll have the right products in the right place, in the right segments, winning us quality market share. We're ready for this because we've done all the heavy lifting. It's time to turn on the faucet and let it flow. We have the expertise and the talented hard-working team to make it happen, I assure you. We are in this to win, and no one is better prepared or positioned to do it. So thank you very much. And now I'm going to turn over to a man who holds the Ultium power in his hands, my good friend, Mr. Doug Parks. Thank you.

Thanks, Mark. So EV jokes in such a serious conference, I'm shock, Mark. And Travis, I'm currently not going to do that to you when I introduce you, okay? Because I'd probably find some resistance in the crowd. Okay, sorry, far too much. Okay. So thanks, everyone, for being here. It's great to be in New York City. Mark addressed how exciting our EV products are. It's a great thing to do if you give a presentation to talk about the products. I love them. They are terrific. I've had the pleasure of being in most of them. They're just outstanding. And if you were in some of the products today that quality, that character, that refinement, it's in all of our EV products. People are going to love EVs. And when we build them out, like Mark showed, nothing but the top side here for us. So what I'm here to do is cover the technology that will help enable this portfolio and be reused across our entire lineup. And while we're still in the early days of electrification as an industry, at GM, we've been at this for a while, and we've made significant progress towards our vision of an all-electric future. As Mary said, we're coming out of the first phase of our transformation, investing in technologies like Ultium, Ultifi, software-defined vehicles and autonomous vehicles. I would love to talk to you about Ultifi and our software-defined vehicle team, how we're bringing distributed software to a central compute system. We're creating a platform and all that, that does for us. I'd love to talk to you today more about Super Cruise and Ultra Cruise or technology that's Level 2, Level 3, that's better than anyone's in the world, and I'd love to talk to you more about autonomous vehicles. But today, we want to focus on EVs. So that's what I'm here to talk about today. The early investments we've made to grow our EV development teams and expand our infrastructure and identify and secure the right resources to quickly develop and scale EVs is paying off. Not only are we able to shorten development time lines as a result but we can also do more quickly identify improvement opportunities and make updates faster than ever before. We've entered the second phase of our EV journey where we now begin to scale up our technology in pursuit of zero-emissions all-electric future. We started our EV journey with the development of Ultium, which is neither a battery cell nor a pack but a propulsion architecture and is designed to quickly and economically help build a complete portfolio of EVs that will ultimately exceed the depth and breadth of our ICE lineup. The first-generation Ultium platform spans our entire global footprint from the U.S. to our joint venture in China. We can build everything from high-volume crossovers, SUVs, full-size pickups to low-roof luxury cars, all from the same core architecture. This optimizes reuse of core EV components such as drive units, motors, power electronics and wireless battery management systems. The platform also allows us to continue to innovate battery technology without having to spend more redesign our entire architecture. Within Ultium in just about any -- well, all EV propulsion systems, cell costs account for the majority of battery costs. So getting the cell right is a crucial part of realizing our vision for an all-electric 0 missions future. As we shared, we have begun domestic production of our nickel-cobalt-manganese-aluminum or NCMA cell, which is the right chemistry to meet customers' range and performance requirements. We're on track to reach nearly 40% reduction in cell costs from our Bolt EVs to Ultium, and this is before the incentives from the clean energy tax credit. I want to say it again, this is before the incentives for the clean energy tax credits. We're also focused on our cell costs for the next generation of Ultium to land at under $70 a kilowatt hour for cell cost, and that's in the mid- to late decade. Battery raw material costs could put our targets at risk and, of course, are putting pressure here, but many of our recent supply agreements are aimed at offsetting and reducing that impact. As we expand our EV portfolio, we'll have even more opportunities to scale Ultium, leverage its applications, further reducing costs while looking at alternate technology solutions. The beauty of Ultium is that is not constrained by any one chemistry or even 1 cell form factor, which is crucial and will become even more important as we grow our EV lineup. We use energy dense NCMA pouch cells in the U.S., which we currently manufacture through our JV with LG Energy Solution. In China, our Ultium vehicles using the same packs and modules, are powered by a combination of both nickel-rich and LFP prismatic can cells that are better suited to the needs of the local market. Our anodes have been made from graphite, but we are adding silicon for lower cost and increased energy density. We're also exploring other anode/cathode and electrolyte technologies while making great progress on lithium metal batteries, both in our own labs and through multiple outside collaborations. While longer range, more compact batteries remain a goal, we're also exploring next-gen LFP-style chemistries for more affordable EVs that can coexist with future nickel-rich chemistries as soon as mid-decade. This is all possible because we did the hard work upfront to build this flexible foundational technology. To reduce battery costs, we're also looking at integrating our battery cells more closely with our packs and even our vehicle structures. This will also result in not only lower cost but also lighter vehicles that are more efficient to build and use less energy. Given how transferable EV propulsion technology is from one vehicle to another we'll be able to amortize these costs across larger portions of our lineup for even more efficient capital investments. One of Ultium's biggest advantages is its tremendous flexibility. As I mentioned, we're demonstrating this flexibility today with different cell technology in our North American and Chinese Ultium variants. Despite the difference in chemistry and form factor, these cells can essentially drop right into the same Ultium modules and packs we use in the U.S. We'll continue to build on this flexibility as we optimize future products for customer performance and affordability. Once new technologies like pure silicon, lithium metal anodes, solid electrolytes and others are ready we believe we can easily bring them into all Ultium-based vehicles. We can also develop products much more quickly than we could with our ICE vehicle architectures due to the modular, reusable nature of the platform. With our ICE portfolio, we have multiple 4, 6 and 8 cylinder engines plus diesels and multiple transmission families to handle all the torque levels as well as all-wheel drive systems. Then we have to package each of these unique solutions into multiple vehicles. By contrast, Ultium allows us to achieve all that with one common architecture design from the ground up to reap the efficiencies of being used portfolio-wide for our EVs. Even when we have multiple Ultium-based variants in North America by mid-decade, this reduced complexity will allow us to use only 1/4 of the battery pack and drive unit combinations compared to ICE, one quarter. Not only does Ultium provide us that flexibility and efficiency, it's also helping us to shorten our development time lines from ICE programs to about 95 weeks on average, about 95 weeks less, and 25% fewer part numbers. In just 1 example, we're projecting that Silverado EV will use 45% fewer part numbers than its ICE equivalent. Can you imagine, 45%, less parts of design, validate, tool, build? This complexity reduction is important as it reduces our cost significantly. We're also more easily able to do things that can be costly and difficult with internal combustion propulsion architectures. A good example of this is our ability to easily offer both front- and rear-wheel drive variants of the Blazer EV. With Ultium, we are building out an entire retail and commercial portfolio while also leveraging this technology for nonautomotive applications. It's the driver of our next phase of growth. As you know, our first battery cell making joint venture with LG Energy Solution in Ohio is now up and running. Two more are under construction, one in Spring Hill, Tennessee, and the other in Lansing, Michigan. And we'll soon be announcing the location of our fourth cell-making site. Altogether, we expect that these 4 plants will give us the capacity to build more than 1.2 million cells per day. Can you imagine 1.2 million cells per day? That's more than 160 gigawatt hours of total cell making capacity per year, and we're targeting that by mid-decade. Enough sells for more than 1 million EVs per year, having multiple cell plants producing the same component that will span our entire portfolio enables efficiencies that we couldn't have imagined with ICE. Another advantage of our JV cell production is that we can better protect against supply chain disruptions and ensure that we meet our projected volume growth throughout the decade and beyond. With the combination of LG's electrochemical expertise and our century-plus of manufacturing experience, we're helping to ensure our battery cells meet our rigorous quality standards. By vertically integrating this in this space, we believe we'll be able to get products to market faster, even as we adapt them to meet evolving customer needs and better control costs along the way. This localization in cell-making and critical precursors like lithium phosphate and cathode active material or CAM not only makes for a more secure robust and affordable source of key components, but also unlocks valuable EV tax credits for our customers that I mentioned this is before valuable EV tax credits, I think I did. We've already learned plenty from the first Ultium cell plant in Ohio that will help us move even faster with the future facilities. Quality is our #1 priority. We'll only launch when we're ready, and we will roll all of those learnings into our following plants in Spring Hill and Lansing. As Mark said, we have the same launch team that moves from plant to plant. So we will learn and take those improvements with us. We're also helping to pioneer cell manufacturing processes at our Wallace Battery Cell Innovation Center. The Wallace Center, at our Global Tech Center in Warren, Michigan, complements our 2 other existing facilities, the Estes Battery Systems Lab and our global R&D center. The Wallace Center is a great collaboration between our trusted partners as well as our own R&D and production engineering teams and will allow us to build large format prototype battery cells in the same facility where we're developing them -- where we develop them. It typically takes many years working with a cell supplier to develop and evaluate a new chemistry in a large-format cell. The Wallace Center will allow us to do this much faster and on our own time line with our own technology. This will create better speed to market for our future battery technologies. The Wallace Center also builds on the great work of our R&D team, which already has more than 2,000 patents granted and pending in EV battery technology including 60 patents and trade secrets and an additional 46 pending in critical areas of future battery development, such as lithium metal electrolytes, anodes, cathodes and binders. With our Estes Battery Systems Lab, our R&D battery facilities and the Wallace Center, few automakers have a battery development footprint in place that can match what we already have. This is how you industrialize this technology. This is the Mike that General Motors brings to the table. We also have a critical advantage when it comes to our North American cell manufacturing plants. Similarly, our world-class global purchasing and supply chain organization is a huge advantage for us as we transition from ICE to EVs. There's a lot of concern about where all the minerals that will power the changeover to EVs will come from. Our team has secured nearly a dozen and counting supply agreements to ensure that we have enough raw materials to meet our projected capacity demands. The support and commitment of our suppliers has helped us manage the unprecedented challenges impacting the global auto industry. GM's consistent results in the annual Plante Moran's Supplier Working Relations Index study that came out this year, further validate our commitment to build a strong supplier relationship with the highest levels of trust and transparency. This will be instrumental as we build a more secure, scalable and sustainable supply chain to support our EV growth. Battery-grade raw materials are shooting up in price these days, but we've taken steps to understand, define and control the flow from raw materials to finished products and learn what will help us succeed both in the near and the long term. We've acted early to lock up raw material sourcing for the foreseeable future. We recognized how crucial the acquisition of battery raw materials is, and we created a dedicated structure within the purchasing and supply chain organization strictly focused on this. Their work has led to many of the announcements that I will even cover today. GM has signed binding agreements to secure the battery raw materials to support 1 million units of annual capacity in North America by 2025. These are not just handshakes. These are not just meetings or MOUs, we've actually locked them up with binding commitments: an agreement with Livent for the source of lithium hydroxide increasingly from its North American facility starting in 2025; a strategic investment and commercial collaboration with CTR to source lithium from the Salton Sea in Imperial, California using a closed-loop geothermic process; an agreement to secure sustainable cobalt from Glencore's Marine in Australia. We've also made a strategic investment in Queensland Pacific Metals for cobalt and nickel processing in Australia. Additionally, I'm pleased to announce today we've secured a long-term agreement with Vale for high-grade nickel source and processed in Canada. We also have an agreement with LG Chem for enough cathode active material through 2030 for the equivalent of 5 million units of EV production. A joint venture with POSCO on a CAM plant in North America, which we expect will open in Quebec in the first quarter of 2025. And we've reached a separate agreement with POSCO to supply us with CAM material from their South Korean operations in the interim. We are direct sourcing from a mix of established and junior miners to help us manage raw material costs. Lithium will continue to be important regardless of which battery formula we settle on. We have some price controls in place for this valuable mineral that will dampen the volatility and the pricing we've seen and that will smooth out over time. And by the way, the new clean energy tax credits will help us accelerate this process of creating a domestic supply chain for EVs here in North America. The credits are very much in line with the strategy we've been executing for the past few years and will enable us to increase our footprint domestically with free trade agreement partners. Beyond battery cells, we're also ensuring that we have a long-term supply of key EV motor components. To that end, we have binding agreements with GE to support the development of a North American and European-based rare earth, copper and electrical steel value chain. MP materials to supply U.S. source and manufactured rare earth materials, alloys and finished magnets from neodymium-iron-boron. Construction on the MP facility in Fort Worth, Texas, has already begun and VAC to supply locally sourced and finished permanent magnets. In addition to this, we have other agreements in the works that we look forward to announcing in the next couple of weeks and months. The team is building on existing supplier relationships and forging new ones. And for certain commodities, we will direct source up to 75% of our needs through 2030 with a focus on North America. We think this level of vertical integration will mitigate risk, drive down cost and help us deliver upside volume opportunities. It's worth pointing out that our new approach on raw materials encompasses the full life cycle of those materials from extracting to recycling and then turning those materials back into new battery cells. We're focused on driving this circularity in our EV battery supply chain, and we're working to incorporate recycled EV materials in our batteries. This is not just good for the planet, it's good for business. It will reduce cost, help increase and further localize our battery supply chain and lower dependence on material raw material extraction. Our recycling activities are already underway with existing batteries, but we also have recycling affiliates that will take scrap from our cell plans and return the critical materials to make new batteries. New processes like hydrometallurgical recycling are also enabling us to recover more materials from the battery and to do so, with a positive value, meaning, we can either reuse those materials ourselves or sell them at market rate instead of having to pay someone else to recycle them for us. So we've talked about technology. We've talked about materials. We've talked about our relationships with our supply partners, but the most important key to our success is our team, our people, I know we have the right team in place for this mission. By realigning our product development organization, we've created a forward-leading battery organization that lives and breathes batteries and innovation. We already have nearly 60% of our product development team working on EVs and software, 60%. By 2025, we expect this number to grow to over 70%. If you want to talk about how we're transitioning from ICE to EVs, there's a graph. We now have 2 senior leaders reporting to me that are in charge of separate but linked organizations dedicated to different aspects of furthering our mission. One team is executing the battery strategies that we've showed you today, the Ultium, the cells, the modules, the packs, our launches, and that's a large focused, empowered team. We have another separate smaller team that's more entrepreneurial and they're focused on growing our battery technology and reach and access externally, ensuring leadership in cell chemistry and cell design. We're laser-focused on what our competitors are doing, what start-ups have come along and where we want to invest next. With the abundance of new startups in the battery space, we're allocating significant resources to partner with or even acquire high-tech entrepreneurial companies that can help you realize our vision. Thus, we have realigned our global product development organization to ensure GM as first to know, first to act and first to integrate. That will help us both lead and scale over time. We're investing in growth, our battery teams and our battery teams through internal engineering expertise and new talent from universities and industry that will look for new and innovative solutions. As you can see, we firmly believe we have the right strategic approach with our technology, our supply chain, our organization, and the relationships outside the company to move us quickly into this next phase of rapid EV acceleration. That's how we're remaking this company and this industry. We're taking 100-plus years of high-volume manufacturing experience and expertise and using it to -- applying it to a fantastic, flexible, modular Ultium platform that will allow us to quickly build a full lineup of EVs at scale. That's the bottom line. It's how we're going to win. Thank you very much for your kind attention today. It's my pleasure to now welcome Travis Katz.

All right. How's everyone doing out there? Good. I am thrilled to be here with you in New York today. It's awesome, obviously, to see the stuff that Doug's team is cranking out and just the scale at which this company is moving. So this is a super exciting moment for us. I mean, we just heard from Doug about the investment GM is making in Ultium and the competitive advantages that we believe this platform is going to provide us, allowing us to drive down costs through scale and innovation, while rapidly and effectively bringing new vehicles to market, but there's more. Ultium's power and versatility can also help us unlock entirely new markets. In the case of BrightDrop, it's going to allow us to decarbonize one of the fastest-growing commercial segments, last-mile delivery, in a way that's good for the bottom line and good for the planet. The record-breaking speed that BrightDrop is gone from concept to commercialization is the perfect example of Ultium's power as a platform for growth. The products we developed served companies in 2 high-growth markets, last-mile package delivery and online grocery. Combined, these 2 segments represent $0.5 trillion in TAM. That's $250 billion for last-mile package delivery and $240 billion for online grocery. Both of these, as you know, grew explosively during the pandemic and are expected to continue to grow at double-digit rates through the end of the decade. At BrightDrop, we're offering solutions aimed at helping the leading companies in these industries do more with less, improving efficiencies while eliminating carbon emissions and reducing congestion. To do this, we've developed a suite of products, our Zevo, all-electric delivery vans; BrightDrop Trace, our electrically propelled smart containers; and BrightDorp Core, a software platform focused on helping companies better visualize and optimize their last-mile operations. With the speed that we brought these products to market and the incredible levels of customer demand we're seeing, I'm thrilled to share that we are on track to generate more than $1 billion in revenue in 2023, $1 billion just 3 years after launching the company. That will make BrightDrop one of the fastest companies in history to hit this milestone. And to put that in perspective, it took Tesla 10 years to generate their first $1 billion of dollars. We're going to do in 3. That's a great start, obviously, but we're not stopping there. We are on a journey to achieve $10 billion of revenue by the end of the decade. So how are we going to do this? Well, we set up BrightDrop to work a little bit differently, operating with the speed and focus of a technology startup while leveraging all the strengths that GM brings to the table, which you've seen already today. We believe this combination creates powerful competitive advantages that other companies are going to struggle to match, and we're scaling at record pace. We are on target for start of production at scale of the Zevo 600 in Q1 of next year. And we are going to begin to ramp quickly from there, with the capacity to deliver over 50,000 units per year at our CAMI facility by 2025. We've had overwhelmingly positive feedback on the performance of these vehicles in the field. As you probably heard, we have more than 150 of these vehicles on the ground in Los Angeles with FedEx delivering packages. And I got to tell you, drivers love them. Once they drive these vehicles, they don't want to go back to an ICE. They're quieter. They're easier to drive. They're safer. And in a time when there's labor shortages these differences matter to companies. They really want to make it work. Demand for these vehicles is strong. We have reservations from some of the biggest names in the industry, Walmart, FedEx, Verizon and Merchants Fleet. GM's recent agreement with Hertz, which Mary mentioned, to buy 175,000 EVs from GM includes BrightDrop vehicles. This is great because it allows companies that are intimidated by the transition to EV, to have a "Try Before You Buy option," making the transition to electric that much easier. And it's important to note that we are continuing to see strong demand despite the broader macroeconomic uncertainty. Why is that? Well, commercial fleets see huge economic benefits in transitioning to EVs. We estimate that our customers will save nearly $10,000 per vehicle per year when they transition to a Zevo from a traditional diesel Step Van. When you add in the potential for clean energy tax credits of up to $7,500 per vehicle, the economics of making a switch have been -- are more compelling than they've ever been. But the BrightDrop solution is bigger than just EVs. We've developed an entire suite of products around the Zevo to drive continuous innovation and last-mile delivery, one that can expand and evolve to meet new customer needs as they arrive. Our Trace eCarts, for example, which -- there's actually a few of them over here, if you haven't seen them yet, you should check them out. They offer a novel solution to real-world problems. In pilots with FedEx, drivers were able to deliver 25% more packages per day using the Trace and reduce their curbside dwell time by 50%. These game-changing results have caught the attention of the industry, and we now have pilots going with a broad range of companies across delivery, retail and service industries across North America. We also recently unveiled the Trace grocery. This smart temperature-controlled unit is designed to drive efficiencies in the exploding world of online grocery. Kroger, America's largest grocery operator is on schedule to take possession of the first unit early next year. And we've seen incredible interest from other players since our unveiling. We're going to be offering our Trace eCarts to customers on a subscription basis, generating recurring cash flows and attractive margins. And of course, the core of the BrightDrop ecosystem is software, a product suite we call BrightDrop Core. We expect software subscription to be a part of every Zevo and Trace that we sell. It's designed to help our customers not just reduce their carbon emissions but to better optimize their operations, leveraging the connectivity and the data streaming off these smart products to provide them with better visibility, insights and control than ever before. Our initial offering is going to include a user portal, mobile productivity apps and a digital driver experience that will help to streamline day of delivery management, and we're just at the beginning of this journey. We recently acquired a company called Moraine, born out of Stanford's Autonomous Research Lab. Their technology uses AI and machine learning to help optimize the pathways that companies use to make deliveries. Using this technology, we will be able to help them design smarter routes and identify where new modalities, whether e-carts or micro hubs can drive further efficiency, and this technology is laying the groundwork for the future of delivery. So as companies begin to explore adopting autonomous solutions, BrightDrop Core will help them figure out how to identify these -- or integrate these solutions into their last mile operations. So to support this journey, we need great talent, obviously, and I'm pleased to share we've got an incredible roster of employees, from seasoned tech and automotive leaders and entrepreneurs to some of the brightest grads in logistical modeling, AI and software engineering. Palo Alto, California, in the middle of Silicon Valley, where BrightDrop is headquartered, and it's the perfect cauldron for developing hardware and software that disrupts the status quo, and unlocks new markets and revenue streams. BrightDrop's market velocity began with our record-setting 20 months from concept to delivery of the Zevo, the fastest vehicle in GM's history. Our model is agile and innovative, with vehicles on the road today and production volume ramping, thanks to GM's strengths in manufacturing and supply chain, and of course, Ultium. Our industry-leading customers are taking notice of our unique value proposition and they're flocking to our door. And by providing advanced simulation software, BrightDrop will help customers understand and model how this new technology will help support their business, helping us realize the future of electrified commercial delivery with solutions that will continue to evolve over time. Speaking as an entrepreneur, BrightDrop's rapid growth is a testament to how GM's platforms and strengths will not only allow for a rapid scaling of our EV portfolio but serve as a platform on which we can launch entirely new businesses like BrightDrop. As we enter a period of rapid change, it's clear to me that GM is not just building EVs, we're developing an ecosystem that will transform the way the world moves people and goods, launching entirely new business models in the process. In the case of BrightDrop, this business model is designed from the ground up to deliver game-changing efficiencies for our customers in one of the largest and fastest-growing commercial segments, again, a $500 billion segment, while delivering a more sustainable future for all of us. Thank you. So I think we are going to take a 20-minute break now, and then we will bring on Paul Jacobson to share all the KPIs. [Break]

Please welcome GM Executive Vice President and CFO, Paul Jacobson.

Hello, everybody. As you're working your way back to your seats, I really apologize for this, but Doug told me to tell you all that I'm all charged up to be here. You just can't beat engineering humor. So I thought I'd delight him. First of all, thank you all for being here. And hopefully, you'll enjoying yourself with some nice snacks and got a good chance to hit the restroom. I know there were some lines out there, but really delighted to have you all here. When we started this day, we talked about having a lot of ride and drive experiences and it really never occurred to me that at the end of the day, the most popular vehicle is going to be the BrightDrop. I heard there was a line outside for people to drive the BrightDrop. But as I started to talk to people, it wasn't about experiencing the vehicle. Most people just wanted to pull it into the center lane, turn on the hazard lights and get out. So I'm not sure that's the spirit of what we're trying to do here, but I'm glad you guys got to experience that and be a king or queen for a day. We're here today because it was just about a year ago that we laid out our ambitious plans with our 2030 vision, talked about doubling our revenues while expanding our margins to 12% to 14% over that time period. And we talked about a whole suite of growth businesses. We talked about our EVs. At that time, there was a lot of skepticism. GM had never put out really long-term targets like that. And whenever you're talking about 7, 8, 9 years down the road, there's a lot of skepticism. We get that. We understand that. And over the past year, we spent a lot of time talking about why we're so convicted about those levels and why we know we can hit that. And the #1 question that we've gotten across the board has been really, prove it to me. How do I know? So we'd always said that, that was sort of the first step in the process. The second step in the process is really how do we draw you a roadmap over the next 24 to 36 months that when we hit those numbers, we can demonstrate you firmly that we're on track to hit those 2030 goals. And that's what today has really been all about. We are hitting -- we are on track to hitting those goals. And hopefully, each and every one of you have gained some confidence today from listening to our leaders talk about each of their respective lines of business. We're fully committed to those 2030 goals and sharing key midterm progress to make sure that we're getting some metrics that ultimately we can continue to report on and show you where we're heading. So let's spend a little bit of time talking about what we've heard so far today. Mary talked about our compelling strategy to fundamentally transform the business and create a much more sustainable platform for the business going forward, really enhancing the structural strength of where we are. And make no mistake, we intend to lead the industry in this EV transformation. Hopefully, you're learning that the LTM advantage creates a position that no one on this leadership team would be willing to trade with anyone out there in the business. And we're going to demonstrate this with the incredible suite of vehicles that Mark showed across the board. And it might seem like a lot. We had a lot of questions, why isn't simpler better? Well, the reality is at the end of the day, we need to meet customers where they are because that's what GM has done, that's what GM is doing and that's what GM will do with this transformation because we've got the right portfolio for the right customer base to win in both ICE and EV and that's what's critically important. In fact, we've already gained more than 8% of the market share with Bolt EV and EUV in the growing EV segment. We've done this before and we've really begun to scale LTM. And when you look at the work that's been going on for the last several years, the transformation of our footprint is going to allow us to scale faster than anybody else out there. I can't begin to tell you how excited we are about the ramp of volume that we see coming over the next 36 months to reach 1 million vehicles in annual capacity by 2025. This is what's going to provide a smooth transition for our customers that want to transition to EVs as well as continue to earn market share in areas of country that we have underperformed. Mary showed you all of those statistics about what our reservations, what our order books look like for people that are new to GM. And that's what's going to allow us to grow our EV revenues to $50 billion or more by 2025. Incredible rates of growth that you see based on the foundation and the platform that we've created. And all of this is made possible by the incredible work of talented people, billions of dollars of investment that we began making a few years ago. But at the same time, we've also been reimagining the way the customers interact with us and interact with our dealers. Mark talked about how we're giving them the option to purchase GM vehicles the way they prefer through their channels. He also highlighted the awesome opportunities that we have to reduce our distribution costs by $2,000 per vehicle to GM, while benefiting our dealer partners by lowering the overall cost whether it's through the regional distribution model or it's through the simplicity and the efficiencies that we get through the DRP system and that retail platform or even ultimately reimagining the way we market and take vehicles to the customer. Then we talk about Doug, and what he talked about was ultimately the advantages of the fully integrated battery ecosystem. This is going to drive meaningful cost reduction, 40% from what we see in the Bolt EV and EUV. And it's really driven by 5 main areas. Number one, it's chemistry improvements. He spent a lot of time talking about the flexibility that LTM provides for us because we know battery chemistry, energy density, cost, raw materials, they're all changing rapidly. And while ultimately the industry will sort of coalesce around a couple of solutions. The technology continues to grow. Ultium has the flexible capacity to be able to respond to that. So not only do we have the capability to build a broad suite of vehicles, we also have the capability to really drill down at the chemistry level to make sure that we are optimized the best we can for what customers want and where we need to meet them. Cell volume, of course, scale matters. 1.2 million cells every single day because we can build the same cells, whether they're going into a HUMMER EV or Chevy Equinox. And that's the thing that's missing, and I think a lot of folks when we're looking at why don't we just produce 3 vehicles, why don't we just produce 4 vehicles? Because when you look at the curve of adoption, you have to go to where customers are. And we spent a lot of time talking about that today. Structural efficiencies in the vehicle, reducing the part combination. Doug went into great detail about where we see the simplicity of electric motors versus the complexity that we have in transmission and drivetrains today. And then ultimately, we're just beginning to go to reuse capabilities. Whether we're talking about battery recycling and reusing those materials in future batteries or we're talking about repurposing the batteries through GM Energy and other platforms like that to be able to use it. So Ultium is only going to continue to get better. And as Doug mentioned, we expect cell cost to be below $70 a kilowatt hour by mid to late decade, significantly improving the margins in our portfolio even beyond what we're talking about today through 2025. Then me have BrightDrop. Travis did such an amazing job talking about Ultium's versatility to take us places that we've never been before. This is not about how do we design a battery so that we can serve delivery trucks. This is about how do we take the battery and the flexibility inherent in that system to expand to a market that we haven't served before, one that we know is growing rapidly and is going to continue to do so as every company out there is challenged to improve its own ESG footprint. And because we have a solution, because we have a reputation as GM, because we have the brand loyalty, that extends into Ultium and ultimately provides a platform for incredible growth. And as you've seen from the team, whether it's the Trace eCarts or the software, the speed at which BrightDrop is innovating is pretty impressive. And they're going to hit $1 billion in revenue next year. $1 billion next year, it was just a couple of years ago that we introduced BrightDrop at CES to a lot of great fanfare and it's here and it's here at volume. And it's here driving $1 billion of revenue next year, but that's just the beginning of what they're going to be able to do. And what you see in BrightDrop is that it validates our commitment to establish the platform in new areas, growing markets, new lines of business that we haven't served before. So I'd just like to take a minute to thank everybody that's contributed to all these ideas and all this platform. This doesn't happen overnight. And I know that a lot of you that have been investing with us have been patient for what we've been doing, and we thank you for that. The time is coming where those investments are materializing very, very quickly and very rapidly putting us in a position to be able to lead the industry, which is where we're going. But we can't do that ultimately without our team and its execution. When you look at what we've done over the last few years, our execution has allowed us to achieve outstanding results in the face of, let's face it, unprecedented uncertainty in terms of the complexity, the magnitude, the volume of things that we've been facing over the last couple of years. And many of you have heard me say before, the thing I'm probably most proud of, the GM team in my short time here, is in the midst of all that uncertainty, what did we do? Did we make excuses? Did we complain? Did we say, what was us about our fate because we have all this money to spend and we can't do it? No. What do we do? We put our heads down, we executed and we accelerated. So we're now up to 1 million vehicle, EVs in North America in 2025. That's double of what we were just a year ago. We're leaning into the investment, we're doing what it takes to generate the internally generated cash that's going to allow us to pay for these investments in the future. And probably no greater example of that than what we've seen in 2022, where we have consistently reiterated that we're on track to hit our 2022 guidance. Back in February, when we launched our guidance, there was a lot of skepticism. We talked about $2.5 billion of cost pressure, then we immediately came back after that and said, no, it's $5 million. There's another $2.5 billion, but guess what? We are going to hit our numbers. And here we are now in middle of November. And what are we going to do? We are going to hit our numbers. No excuses, just a lot of tenacity, a lot of adaptability and a lot of flexibility in how we're doing this going forward. So before we get into '23 metrics and talk about EVs, I want to spend a minute just updating our guidance for 2022. So today, we're tightening our EBIT-adjusted range for 2022 to $13.5 million to $14.5 million. This is from -- was $13 million to $15 million. And of course, we're tightening EPS as well to $6.75 to $7.25 a share. But most importantly and additionally, we're raising our free cash flow guide for the year. We've been talking all year about $7 billion to $9 billion of adjusted free cash flow. We now expect automotive free cash flow to be $10 billion to $11 billion this year. Another year of really incredible results and execution by the GM team, and I just want to say thank you to each and every one of them that did that. But we're able to do that for a number of reasons. The power of our brands. You see that, whether it's ICE or whether it's EV, the portfolio that Mark talked about, incredible brand power that customers just can't get enough of. Number two, the strength of our financial position. The hard work that's been done in the years before I arrived, getting out, exiting businesses that were challenging, focusing on improving those that have remained and really driving the financial performance, that has laid the foundation for what we've been able to execute over these last few years. And most importantly, it doesn't happen without the terrific work of 150,000 employees worldwide, and I'm truly thankful for those. So now let's turn to 2023. Many of you are asking that and no, we're not going to provide formal guidance today, as we said on the last Analyst Call. But we want to give you a little bit of thoughts as we form and finalize our budget for 2023. And I'm going to start by just simply saying this. I'm not sure anybody in this room, I'm not sure anybody on this webcast knows what's happening in 2023. We've got some ideas, but we're positioning the company to put us on the straightest path that we can knowing what we know today. But undoubtedly, in 2023, we're going to rely on that same tenacity, that same agility and that same flexibility that we executed in 2022 because you've got a team that's convicted on hitting its numbers, driving that cash flow to continuing to fund the journey. So as we're planning for 2023, here's a look at some of the headwinds and tailwinds that we see going forward. We expect the macro to remain volatile. We are projecting, as we've said before, a 50 million unit SAAR across the world -- or across the country. We think that ultimately, at the end of the day, that's a little bit of a step down in demand from where we have been. Now loss and all that is the fact that the industry hasn't been able to produce the demand for a couple of years. So there probably is some pent-up demand out there that is going to continue to work itself through in 2023. So we probably should expect some pricing normalization. If at the end of the day, it doesn't happen, we expect we can outperform. And that will be great because we'll generate even more cash than what we think we can do. But we've got to make sure that we set a platform that's reasonable, that's affordable so that we can lean into the investments that we need to make. We also think that some of the supply chain challenges, while they moderate, are still going to be there in 2023. So I don't think that we have a snap back to normal production across the industry in 2023, which is going to help to tamp down some of the other inventory pressures that you might see across the industry. We are facing a decrease in pension income, which you'll see next year. We estimate that that's going to be $1 billion to $1.5 billion across the P&L. But a couple of things that I want to make note. Our funded status on the balance sheet over this time period has actually gotten better. It's actually improved our funded status over time. So what you see happening is a difference in the way that the discount rate is calculated versus the way the expected return on fixed income assets is calculated. That's creating a diversion in pension income. But as I said before, funded status has improved and no material cash contributions are required for 2027. So well, yes, the face of the P&L might be impacted and will be impacted by this, at the end of the day, there's nothing fundamentally different about the business because of that adjustment. GM Financial. We do expect a bit of a normalization in EBT from GM Financial. While we expect them to keep growing. The team is executing incredibly well. We will see some normalization from lower used car prices, although we're still executing on a lot of contract residual even as prices have come down the way they have. We've got some normalization of credit reserves because the CECL requirements require you to project out into the future and we do see the credit environment normalizing over the next few years. Nothing fundamentally different about the business there. And we do see some higher funding costs. But when you look at what GMF has done, especially for the last couple of years, I wouldn't trade our financing for anything out there in the world there. And the absolute best captive auto finance team out there, and they've done an incredible job of keeping GM consistent even through some of the challenges that we've seen across. So Dan, Susan, thank you very much for everything that you've done for the team. But it's not all challenges next year. We'll see some tailwinds, too. The supply chain challenges that I mentioned, they're going to moderate a little bit allowing us to take volume up a little bit higher going forward, which is going to enable us to absorb some of the fixed costs across higher volumes, but we want to make sure that we manage that and keep the same tension that we've seen over the last few years. Commodity price normalization. You've already seen commodity both in the traditional commodities as well as the platinum group metals start to come off of their highs, providing some tailwind for us into 2025. And if you recall back, I think over the last 2 quarters on our Analyst Calls, we've been asked a lot about, well, what about a recession, what about a recession. And one of the things that we said is pricing changes don't happen in isolation. The macro doesn't happen in isolation. And that's exactly what we're starting to see. In fact, we've actually seen commodity prices come down, while prices have remained relatively stable over the last several months. But I can't stress enough how agile we need to remain. That's what's really been the energy driving everything and the acceleration over the last couple of years is agility. When we announced that guidance back in February that many people were skeptical about and we've managed to hold that through the year. Me be the first person to tell you the year looks nothing like we thought it was going to back in January. But that's a testament to what the team has done because we've taken all those changing variables and we said, how do we ultimately fit into our priorities, our spending, our retail phenomenon and make sure that we deliver what we need to. That agility is going to continue to be critically important going forward because what it's allowed us to do is not only accelerate our journey, but resume our capital allocation plan and begin again returning capital to shareholders. Now this isn't because we're out of ideas. Trust me. We've got ideas. And I don't want to work for a company that doesn't have ideas out there. But our limits in terms of what we are able to invest effectively to drive the return on capital for our shareholders is limited by our ability to execute by our fixed cost base, by our resources going forward. So as we leaned in and executed and accelerated, we're doing it smartly. But because of that cash generation, it allowed us to reinstate our dividend back in August as well as resuming the repurchase of shares. And balanced capital allocation has to remain a hallmark of our strategy going forward, because we've got to make sure that for those investors that are with us on this journey, you're continuing to see the benefits of investing alongside us. So while investing in our growth remains a priority, we're going to continue to look at and evaluate future shareholder returns as a consistent rationale for what we're doing with our cash flow. So let's talk about our targets. Mentioned last year, 2030 targets that we laid out, a lot of skepticism, totally understand that. But what we wanted to do and what we said that we were going to do at this Investor Day is, what do the next 24 to 36 months look like? Because like any journey, when I start to see the mile-markers and the exit ramps that I know that I'm looking for on my long road trip, I know that I'm making progress. When I see city limit signs, I know that I'm getting to my destination. So what can we do to give those mile-markers, those city limit signs over the next 36 months to give you the confidence that we have in hitting our numbers? So we're going to give you periodic updates on this from time to time to offer transparency on this journey going forward. And before I begin, and you've heard it multiple times today, the numbers that I'm sharing with you today do not incorporate any of the recently passed clean energy tax credits. I will provide some details on those later, and we'll start to quantify some of those benefits. But the numbers that I'm giving you upfront are important to show that it's just the core vehicle. Because we need to make sure that we demonstrate that we're on the trajectory that we said last year before those clean energy tax credits even existed. And that those tax credits are actually accelerating the realization of some of the metrics that we thought we were going to achieve later. So let's talk about those metrics. So first, let's talk about revenue. Our EV volume, the new customers that we've talked about, the beginning ramp-up of the software revenues in the software business as well as revenues from the new ICE vehicles that Mark talked about as well, are going to allow us to grow our revenues at an estimated 12% compounded rate through 2025 to achieve total revenue of $225 billion in 2025. Now before I go on from that, I didn't hear any audible gasps in the audience because I'm sure there's some skepticism. You're going into a downturn. Prices are going to decline. How can you be confident about that? We can be confident on that because of all the metrics that Mary showed you about all the people that are new to GM with these vehicles that are launching and growing at scale over the next 36 months because that represents new revenue. It represents customers that are probably not going to be as deterred or as price sensitive because we know from the demand that we booked of people that want our electric vehicles. Our job, our risk is to execute. It's not about macro factors when we're talking about these new EVs and bringing them up to scale. It's about execution. And I know we've got the best team in the business to be able to do that. So we're confident that we'll be able to hit those goals. And that will put us on that trajectory as we said last year, doubling our revenue by 2030. But in order to do that, we are going to need to make sure that we ramp up CapEx a little bit. So you've seen before, we were kind of $9 billion to $10 billion a year. We're updating that to $11 billion to $13 billion a year through 2025. This is really driven by the acceleration that you've seen over the last 12 months and what we're going to continue to do going forward. Because what we've done is we pulled forward capital investments. We pull forward investments in engineering. We've pulled forward investments in EV and AV. We've pulled forward battery plants, and we pulled forward manufacturing capacity. But what that should reflect to you and what that should show you is our determination and our grip about transforming this company as quickly as we possibly can. Because it's this capital that's allowing us to rapidly increase our EV volumes going forward. As we've said, we're on a path to produce 400,000 EVs by mid-2024 and then getting the capacity of 1 million EVs annually by 2025. One of the other areas that we get a lot of questions about is, okay, what's that going to do to your margins? Many people speculated that our margins are going to take a massive decline over this time period because you can't get to EV profitability and as you ramp up, you're going to have a big decline. During this period of rapid growth between now and 2025, we expect to maintain historical North American EBIT-adjusted margins in the 8% to 10% range through the second -- and ultimately expanding through the second half of the decade. So last year, we talked about we can double revenues while expanding margins to 12% to 14%. So during this phase, that Mary talked about as Phase 2, 2023 through 2025, we're actually projecting we can do stable margins in the 8% to 10% range and expanding those as we get to the back half of the decade. As we start to see BrightDrop ramp further, we start to see software ramping, and we start to see crews ramping up as well up pretty significantly over that time period. So stable margins over the next few years. So let's talk about EV margins. So if we're going to be stable, what do EV margins look like? EVs are currently challenged from a margin perspective, no doubt about that. You've heard from others talking about some of the margin challenges, of course. But they're challenged because of a couple of things. Number one, we're buying cells. We're not making them yet. So as Doug mentioned, we've already started -- we've already opened Lordstown. We're on the path to opening Spring Hill and going on and on through cell plants 3, 4 and then ultimately, beyond. That scaling of cells ultimately gives us that leg up going forward. We're scaling production. We're ultimately underutilized on our manufacturing capacity because we built for the future. We're not building for today. We're not building to optimize just making a few thousand vehicles here and there. We build for that feature. So underutilized capacity, it's okay. It makes sense. But what it does mean is that you can scale rapidly into profitability, which is exactly what we're going to do. So as Mary mentioned, our EV profitability, when we talk about it, includes all those things that are associated with the EVs and with the platform. So it does include greenhouse gas emission credits. We'll transact those between us at arm's length, but we'll make sure that we're looking at that when we report EV profitability because that is a benefit that they provide. It includes software revenue. While small now, this is going to become a growing part of the portfolio as we rapidly expand the car parc and the opportunities to drive revenue across the software platform. And it includes aftersales revenue, whether it's parts for collision or ultimately, enhancements and [indiscernible] for the EVs, that's part of that EV business as well. So we're going to include that in it as well. But it excludes in the numbers that I'm giving you, the clean energy tax credits. But because we're vertically integrating the battery supply chain and everything that we're doing, cell costs are obviously a major component of that. And as we ramp up volume costs are coming down. Doug mentioned that ultimately, we're going to reach 160 gigawatt hours and 1.2 million cells per day in just the 4 battery plants going forward. This is going to enable us to reduce our cost to an $87 per kilowatt hour by 2025. And then even below 70 as we get further along the decade. As a result of the scaling benefits both in manufacturing as well as ultimately the lowering of those cell costs, we expect our [ EV ] EBIT margins to be in the low to mid-single-digit range before any clean energy tax credits. We expect that to happen over the next 36 months. You see how rapid that is because that would just represent about 3 years from the start of in-house cell production to a full calendar year of profitability which is approximately in line with Tesla's post Model 3 launch. And we're doing it across a much wider portfolio that has a much wider customer base over it, which is going to help us grow even faster over the long term. So put very simply, our strategy is to ramp up volumes while improving our cost structure and then ultimately adding incremental margin from these profitable new businesses and 2025 becomes the breakthrough year on our path to 2030 because that's when we can start expanding our margins going forward and hitting that targeted goal of 12% to 14% company-wide EBIT by 2030. So let's talk about the clean energy tax credits for a bit. We fully expect that the clean energy tax credits are going to be a material tailwind for GM. We also think it's going to be a material tailwind for overall EV adoption because there are incredible benefits to customers as well as there are incentives to localizing the supply chain. And this really validates the path and the journey that we've already been on for years before it came into place, bringing things in globally, more vertical integration, how we're looking at onshoring as much as we can going forward. Because we've been doing that for a few years before this, we're actually incredibly well positioned as we look at the limitations that start coming on over time to be among the first, if not the first company to be able to fully realize under the limitations that we get over time. Of course, we're awaiting full detailed regulations. We expect those will come out before the end of the year. But we got a dedicated team that is focused on calculating and monetizing and ultimately realizing as many of those credits as we can, while we pivot and we twist and we deviate a little bit from our strategy going forward to shape it to what we need to do. But there are no U-turns. There's nothing that we've done to date to regret and wish we hadn't done because of the presence of this legislation. It's really validating that strategy and the foresight of the supply chain team. So when we talk about tax credits, we got to talk about the production tax credit. So this gives us an opportunity to fully leverage up to $45 per kilowatt hour, not in any of the numbers that we showed you before for battery modules produced in the U.S. Now there are more stringent requirements and we're not going to get into a commodity-by-commodity discussion of where we are, but all the deals that Doug talked about, all the partnerships, all the ventures, everything that we're doing, as we've talked about in this broad portfolio context is aimed at increasing the capacity to meet raw material requirements under this act, which is going to allow us to realize up to those $45 kilowatt hour credits. From a consumer standpoint, we actually think it aligns very well with our plans as well, not only because of the domestic manufacturing, but because of the broad suite of products that Mark showed you, most of which will end up with an MSRP below the caps that will allow customers to fully benefit from that. So we fully expect the customers are going to be able to benefit from the $3,750 consumer credit in 2023. And then ultimately, in 2024 and 2025, there will be a path that will allow us to maintain the component credit for many of those vehicles and start ramping towards qualification for the full 7,500. So by mid-decade, when our North American focused supply chain comes fully into place, we expect to be able to leverage the full consumer purchase incentive for all of our eligible vehicles. I think that's going to be a leadership position. So when you take all of that into play, we actually estimate that these tax credits are going to be worth $3,500 to $5,500 per vehicle coming from GM through 2025. Together, these credits could add to 5 to 7 points of margin to the EVs, which puts us in a position where the tax credits are accelerating what we were already going to do and get our vehicles to eye-sight margins by 2025. Previously, this was near the end of the decade. And we're still going to do that on a stand-alone basis. We're not stopping with 2025. But this gives us a leg up. It gives us an ability to redeploy that into more investments to scale as we go higher and higher ultimately to our journey of an all-electric future in 2035. But these credits are also going to help create jobs, they're going to accelerate our scaling. They're going to accelerate EV adoption and more. And ultimately, it's going to allow us to move even faster to our goal of zero crashes, zero emissions and zero congestion. Because we'll be able to move across the board with affordable EVs that ultimately bring everyone along and be able to do it profitably and establishing the growth platform for the future as we look at the software opportunities going forward. So hopefully, you've heard today that we've got all of the key elements in place. We've been putting -- we've been at this for years. We're not putting batteries in the vehicles. We're designing the future and have been for the last several years because that portfolio of vehicles, the foundation that we've built by shedding some of those underperforming businesses, creating the ability to invest in what we need as well as the incremental new growth initiatives like BrightDrop, like Cruise. And of course, our highly profitable ICE foundation. When you look at all of these opportunities put together, what you see is a foundation that's going to position us to win for years to come. And I feel very confident that ultimately, we're going to be able to channel our ability to execute and successfully transform this business permanently. I've shared with many of you that this is an incredibly exciting time to be at GM. I couldn't be more blessed to have been asked to be a part of this team and what we've been able to do and to be able to get up here and talk about the achievements of 150,000 people worldwide in the spirit of a transformation that many of our children and grandchildren are going to write about. I just can't tell you how incredibly that feels to be a part of that team. And for those of you that invest along with us, thank you for that. For those of you who haven't invested yet, it's not too late, we welcome all comers. There are a lot of seats on this bus. But we're transforming this company. We're transforming the world. We're riding the history books, and it's incredibly exciting to be here, whether it's as an employee, an investor, a customer, a dealer. This is just a fun journey, and I encourage each and every one of you to join us with this party. So thank you for your attention. Thank you for your commitment to us. Look forward to meeting all of you. And now I'd like to invite Ashish to open it up for a Q&A session. Thank you.

Thanks, Paul. Nice job. So next, we're going to take a minute just to set up for the Q&A. So if you just give us a second, we'll get started. Great. Thank you. I'd like Mary, Mark, Doug and Travis to please join us. So as they take their seats, the other thing I'd like people to know is that we've got other additional members from our senior leadership team upfront as well so they can help answer any questions you may have. This session is going to run about 60 minutes. We look forward to your questions and are excited to hear your feedback. Please raise your hand if you have any questions, and we'll get a mic to you. And once it's your turn, please state your name and your firm and then please go ahead and ask your question.

If we can get the [ house ] lights up, please?

Why don't we get started with our first question over here, please.

A lot of questions. I'll try to keep it to two here. John Murphy from Bank of America. First, if you think about ICE profitability currently with the drag that you have from EVs, I mean we got to be thinking about EBIT margins that are in the low to mid-teens, right? That's incredible. It's kind of even more impressive than what we're -- than everybody is saying right now more than you've done in the past. How sustainable do you think those are? And when you think that when we get to 2025, if EV margins are the same as the ICE margins, it seems like there's a lot of upside to your ultimate margins that you're talking about, even in 2030, just in the vehicle business, the way you're talking about it. And then maybe a second question. As we think about CarBravo and what you're doing in your dealership channel, there's kind of a lot going on there, and there are these potentials for cost savings, you're talking about $2,000, where does that $2,000 go? Does that go into your profits? Does that go back to the consumer? I mean, how should we think about that? And can that also -- as you think about that potential, could that actually help support residual values as you're working through things over time that can really support pricing and ultimate profitability?

Yes. Well, thanks for that, John. I'll start on the ICE profits. And Mark, do you want to take over on the dealer stuff, I'm happy to do it, too. But I think we've long stated that the inherent profitability of the ICE portfolio is stronger than a lot of people have thought and have underestimated. I think when you just look at the results that we're posting this year and you look at the free cash flow, that we're generating even in the face of higher investment that we've seen over the last several years, it is incredibly strong. And that has been masked a little bit by what you've seen us going into the engineering for all these programs that we're launching because there's been a ton of groundwork underneath and behind the scenes. So one of the things I think that's underappreciated is sort of the inherent head start that we have on the ultimate bigger transformation that's taking place. So while we've seen EV growth and adoption start to scale, it's still a relatively small segment. But in order for it to really inflect higher, you've got to be there. And no one is better positioned than us to be able to be there and be where the customer is across those portfolios. And that's been in part because we've, in effect, diluted some of the profitability of the ICE because we've made the investments that we need to, thinking about the long term. Could we have earned more money over the last few years, certainly could have. But that would have been incredibly shortsighted, and it would have been really kind of stewarding a depreciating asset over time because you're under-investing in what you know you need to do going forward. So it actually has been incredibly strong. And we do see the EVs getting there. It's going to take some time. Nobody has said it wouldn't. But the power of the EV tax credits allows us to accelerate the realization of that. But ultimately, we've got to get on a stand-alone platform because they don't last forever, right? So we've got to be able to do it ourselves, which is why we're giving you the metrics that we are, ex-EV tax credits going forward. But we do certainly see a lot of potential there. And that -- plus that includes an ever-expanding software benefit as that car continues to get bigger and bigger. Mark, do you want to talk about the distribution?

Sure. On the $2,000, yes, I said this pretty explicitly as well, John, that it does go to GM. And -- but the efficiency piece of it throughout the dealership is pretty strong as well because you're not carrying all the inventory. We're carrying some of the inventory on a fulfillment basis, returns are going to be higher. And so there's an efficiency through the channel that we just haven't seen before. So that's number one. On the pricing, I think you asked, do you see it continuing? We plan for it not to continue, put it that way. Whether it does or not, the market will tell us that. But I don't think number one, that we're going to have -- and Paul mentioned it in his presentation, I don't think we're going to have a flourishing number of chips that meet demand for all the OEMs in the marketplace and the industry next year. So that won't be fixed. It may be less variable and more constant, but not fully what we -- the industry would like to fully satisfy demand, which means we're not going to carry inventory. We're not going to plan to carry inventory like we do today because our dealers have already adapted into selling into the pipeline and seeing the order as it gets -- exits the plant. So there's tons of efficiency that we've learned how to do and our dealers have been our partners in it. And so I feel really good about it.

Rod Lache with Wolfe Research. Two questions I wanted to ask. First of all, on battery commodities, lithium carbonate, hydroxide, nickel. Could you talk a little bit about what your assumptions were and whether those have been locked in to some extent, obviously, supply chain has been? And then my second question is just thinking about the low to mid-single-digit profit before IRA by mid-decade, so last year, Tesla did 940,000 units, and they did a 27% gross margin and 14% EBIT margin before IRA, and that's excluding ZEV credits. So if you could maybe just explain to us what the differences are or what they still would be out in 2025? And what happens beyond that, that sort of gets you up to the -- those higher margins that you talked about?

Yes. So I'll take the second one first, and then I'll start on the commodities and Doug, do you want to jump in, of course. On the profitability, I think you've got to look across those 2 very different businesses, right? So we're looking at 1 million units of production across a much wider slot. So some of those scale benefits that you could get from doing 940,000 units across just 4 models. We're not going to have. But ultimately, we're going to have a much better, much stronger base across the customer base, which should manifest itself in better revenue performance for us going forward, being able to participate in markets, maybe more and better than our competitors are over time. But ultimately, that's what we've got to get to. We've got to drive to the same level of production efficiencies, which is why I said we're not stopping in 2025. We're actually going beyond that because in 2025, there's still a whole portfolio of vehicles that Mark hasn't talked about because he just talked about 2024 where there's still some engineering going on, et cetera, absorbing a lot of things that Tesla hasn't necessarily had to do going forward. But we're absolutely focused on improving the profitability, even beyond what we told you today and think we can get there. And secondly, on the raw materials, what you saw today is our best estimate updated for kind of current prices and where we see it going forward. So a lot of the benefit of the deals that you're hearing us lock up and what Doug talked about come beyond 2025, where we're co-investing, we're improving and increasing processing capacity in a lot of cases whether it be with CAM or with lithium, et cetera. So we're going to see more and more of those benefits beyond 2025. So I think that's also some of the challenges that you see in the low to mid-single-digit margins leading up to 2025 and then the platform for improving it thereafter. Doug, I don't know if you want to add anything?

No, that was great, Paul. The thing I would add is as we -- it's not the exact commodity answer because that's the best of our information we have today. But as we get longer-term contracts and we kind of lock in the supply and we blend that out with some moderation in commodities, that's kind of what our projections are put together from. But in addition to all that, we're going to continue to scale up our plans. We're going to continue to improve our designs. We're -- every day, we're improving our efficiency of our manufacturing operation so the cost will come out there. And so also planned in our future cost are ongoing improvement in cost reduction in our battery systems as we scale them up, as we start to even introduce some additional silicon in the anode for instance, and those kinds of things. So that's all part of the plan we talked about today.

Just to make sure I understood this because I saw Doug, you had a chart that showed pricing coming sort of down over time. Is that what you've embedded into your forecast and are you subject to volatility still in pricing as commodities go up or down from here?

Yes. So we -- as we've talked about before, we've taken a portfolio approach where we have some spot price exposure. We have some term. We have some co-investment deals across the board. So it's really a mix. But I think most people were looking at where prices are today and expecting that as production goes online, as capital flows into more of these spaces, you're going to see a reduction in prices over time. But we think that's probably more in sort of beyond 2025 period. We do have some of it happening beforehand, but largely, it's longer term.

Emmanuel Rosner from Deutsche Bank. First question is, can you help us a little bit more with the bridge towards EV profitability by mid-decade. And you've mentioned the various factors. You've dimensioned the one around the battery cost. But maybe if we could have just sort of like a starting point to endpoints like what is the current -- can you tell anything around the current level of either profitability or battery cell costs so we can sort of say, okay, here is the benefit you'll get from the battery costs coming down? And then you've also assumed the benefit from software attachment, aftersales, greenhouse can benefits. How much of a contributor will this be towards your low- to mid-single digit?

Yes. So we're not getting the starting point because we have so few programs across the board and consistent with our practice of not talking about specific program capability or performance. But suffice it to say, the improvement is material from where we are right now because, obviously, from purchase cells to producing cells is a major cost savings advantage for us when you look at where we're heading from Bolt to Ultium, there's a major cost saving that happens there. And then, of course, there's all the underutilized capacity that we've got at Factory ZERO at Spring Hill and all these plants that have been built for the future that are not churning out those vehicles right now. So the lion's share of it is really coming from optimizing what we've already built and fitting it into that infrastructure going forward. Greenhouse gas is, we're just simply going to do it at arm's length. So you know the credits, I think, are around $11, and we see that. But that's all we're looking at. We're not trying to game it by bringing profitability to the ICE vehicles into EV because it's important that we set the right standard for ourselves. So ultimately, the lion's share of that improvement has to come for more efficient production, from lower cost cells and ultimately scaling up.

And then on the IRA piece, I guess, of the equation, which would be upside. So $3,500 to $5,500 per vehicle potentially. What are you assuming really in terms of sharing some of these benefits with your battery manufacturing partner, obviously, to the extent that this is a joint venture? And then would this require raising prices on EV in order to capture some of the consumer benefits of sort $3,750 or $7,500 for consumer or for commercial?

Yes. For obvious reasons, we're not going to get into detail about how we're looking at the credits, et cetera. We talked about up to $45 per kilowatt hour and we talked about the consumer benefits as well. So the intent of that is to reduce the cost of producing battery cells. And when you look at our relationship with LG and what we've got with Ultium, is cost plus. So at the end of the day, we expect to retain substantially all of them going forward. But as we look at that going forward, it's ultimately going to be up to the market. We're producing to demand, and we're going to price for demand for those vehicles as well. And our consumers, I think, are going to get an advantage over -- by purchasing GM products over what our competitors can offer because I think we're going to end up being ahead of most of them across the board. So that's why we're emphasizing speed and execution is to ultimately make sure that our customers benefit for it, but pricing is going to be priced on demand and the way it always have been.

It's interesting. Some of our competitors are just now talking about the possibility of vertically integrating. That's very interesting to what our strategy has been over the last 3 years.

If you can just go right behind, right behind of Emmanuel.

He's coming from the other way.

Ivan Feinseth, Tigress Financial Partners. Thank you for this great event. Similar to how you've spoken about the modularity of production of the battery and the drivetrain, can you talk a little bit about the onboard processing power and how you're developing that and what kind of partnerships? And then you were talking a lot about the ongoing ability to software-defined functionality, but being able to, at some point, upgrade the processing power or even at some point, consumers could add features later on that they could purchase in the future to the car. Some of that -- a little bit of views on that.

Man, I can't wait until the next investor conference to talk about software-defined vehicle. There's a lot in your question. So Ultifi has begun, the first real platform that we'll roll out will happen this coming spring in the LYRIQ. And with that platform, that's the dramatic shift of features and functionality that we can add in and add on and display and offer our customers. We have over-the-air update capability on all of the components and modules now, but the true Ultifi software platform will be implemented in the spring, starting with the LYRIQ and then going forward. We already have a significant upgraded processing capability with the Ultium products again starting with LYRIQ and [ Ultifi ] we're able to add on the platform to it. And then as it grows over time, we have significant upgrades in processing capability planned. We actually have a -- and I'm probably getting over my skis here, but we have an ongoing development of the electrical architecture that will support a more centralized compute that will happen after the Ultifi platform goes in. So the capability of Ultifi, the features and the functionality will happen starting the spring and then we will progress the electrical architecture to support that. And when we do it, we'll dramatically upgrade the processing capability as well. So we'd love to talk to you more about that in detail and yes, we'll do that soon.

Mark Delaney, Goldman Sachs. I appreciate you guys having us today. Can I ask a follow-up on the software and services opportunity. It sounds like it's a pretty important contributing factor to get into that EV target you spoke about in 2025. I think in the last Analyst Day, you talked about that eventually getting to $20 billion to $25 billion of revenue by 2030, maybe help us a little bit more, at least roughly, what that could look like in the 2025 time frame because, again, I think it's important part of the EV process?

Yes. So I would say that it's just getting started in this sort of '23 to '25 time frame because there's a couple of things that we talked about. Number one is the software capabilities of the vehicle. So as we enable the functions that Doug talked about. We'll have more on this at a future day. But ultimately, then it's about the car parc, right? It's getting the EVs out on the road and scaling as rapidly as we can. So we'd always talked about how that was backloaded to the latter part of the decade because of that car parc phenomenon. So we're bringing that forward a little bit, but it's not a huge contributor in the sort of 2025 numbers that we've given today, which is where we see a big inflection point going from sort of stable corporate margins up to 12% to 14% by 2030 in the back half of the decade.

That's helpful. One other question, if I could, please. At the -- sorry, your last earnings call, you talked about still seeing very solid order rates and demand and not seeing signs of an economic slowdown. I mean, you talked about that potential to occur in 2023 as you were walking through some of the puts and takes. Any change over the last month or so since you reported earnings in terms of what you're seeing, in terms of the order rates and so the macroeconomic indicators on your business?

Nothing material. And I think just to characterize what we said about 2023, that's how we're thinking about the business and how we're planning for it. It's not necessarily what we're predicting to happen because we've got to position the business to be successful going forward. So if we build our plans assuming that, and ultimately, we're on the right side of the risk equation because if we're wrong and it's better, we're in great shape, if it's wrong, and worst, we're much closer to where we need to be to be able to adjust going forward. But that's why I said what I did leading into the headwinds and tailwinds conversation. It's about maintaining our agility. And building our plans and building in a lot of tension in the system because we did have to make sure that we were starting to scale back some of the things in the pace at which we were doing some of the discretionary things going forward to make sure that we position ourselves well for '23.

Can we have back here with Itay, please.

Itay Michaeli from Citi. Just 2 questions. First, on the EV margin trajectory, maybe you can talk about what you think the variable profit per unit trajectory looks like for EVs. Will [ VP ] per unit kind of hit ICE-level margins before the EBIT margins? And then secondly, thank you for sharing all the data around the coastal share as well as the reservations by region. Just curious what you're assuming maybe roughly for U.S. market share in 2025?

You want to talk about the second one? Or do you want me to? Yes, you want to do that one first?

Go ahead.

So I feel guilty I'm answering all the questions next to Mary. But when you look at the VP, it's a similar trajectory. Obviously, we're seeing significant improvement. Part of the reason and the challenges in the EV portfolio the way we're looking at, is because we have some vehicles that are further along the maturity production curve than others. So a 2024 launch isn't going to have the same economic performance as, say, the HUMMER or the LYRIQ that have a couple of years behind them or the Blazer. So each of the vehicles are on a very different trajectory. But if you look at the programs generally, you see a pretty heavy accretion in VP per unit as we ramp that up and as we start to get into produced cells versus purchased cells.

So I think from a market share perspective, overall, I mean you see, we definitely think we're going to see significant EV growth as we get to that 1 million units in 2025. But you're also, and Mark covered it, we're seeing ICE growth as well. And because we underperform in the coast right now, and we are seeing great interest from our products from people who have never been and we're getting new people into Cadillac, we definitely see market share increase next year, '23, '24, '25. We haven't -- we're not going to share a specific target number, but we see substantial opportunity for growth and frankly, we're planning for it.

Ryan Brinkman from JPMorgan. How should the investors be thinking about the upcoming union negotiations you have in 2023, maybe in light of everything GM and UAW have been through, including the 2019 strike and all the various revelations and investigations and prosecution since then. But also, everything the economy has been through in terms of inflation, wage inflation, et cetera, health care inflation, and what might be incorporated or assumed into the financial projections you shared here today relative to the potential for higher labor costs?

Well, first of all, I think you have to look over 30 years, we actually have very, very many times where we've had very successful negotiations with UAW and frankly, earlier this year, our LLC negotiations went along, and we got to an agreement without any labor disruption and that we thought was in the -- at the right pace from a financial perspective. I think you said it about '19. '19 was a very unique situation that I don't see being repeated probably ever, at least not in my career. So unfortunate, but it's been appropriately dealt with, I think. Right now, we're building a strong relationship with the union, both the UAW and Unifor, we actually just settled an agreement in Mexico as well. And so I think it's a very constructive tone that we're setting. We communicate regularly. Gerald Johnson, who's sitting in the front row is our EVP of Global Manufacturing. He talks to Ray Curry on a regular basis as well as I do. And we have each other's cell phone. So if something is going on we text right away. And there are several things that we're working on, making sure they understand where we're headed from an EV perspective. Frankly, there's a lot of things we work together from a legislative and a public policy perspective. And we've also invested a tremendous amount in our employees. We have upgraded our facilities as we know workplace of choice is important for everyone and the training and how we're supporting the workforce. So there's a lot of initiatives. We've also, I think, did a much better job than we did before '19 of being regularly out in our plants from a senior leadership. Mark and I are in the plants at least monthly, if not more, making sure we -- yes, we're reviewing the operations. We're looking at new products. We're also spending time with employees answering their questions. And it's really interesting, the excitement they feel. They would tell you probably the '18, '19 time frame when they went to the plant, they wanted to know what they were going to get, a nice truck allocation. When I go to a plant right now, they're like, when are we going to get our EV. And our intent is because of the growth that we see and because of the vertical integration that we're doing, we see an opportunity that they'll be -- we'll be able, if we achieve and execute our business to take our employees along in that journey, they're excited about it. Now we understand there's economics, like you said. I mean, we've seen a lot of other industry negotiations. And we think though, with where our employees are at right today, it's a good middle-class wage, that we'll work through the negotiations and manage that and manage the overall cost like we do every time.

Okay. That's helpful context. And then just lastly for me, can you talk about the strategy for managing the pricing of EVs, both from a profitability and customer satisfaction perspective, including for any reservations you may have taken just in light of the volatile battery raw material costs?

Yes. I think the first question was our strategy in pricing, right, with EVs over the -- look, we -- when we started this journey, again, we decided we were going to -- who are we as an OEM? You start with that and you say, okay, well, we've got to be both propulsion -- traditional propulsion and we're going to have to really vertically integrate our cell chemistry, our architectures on dedicated segments where we cell. And we're going to utilize our footprint to the greatest extent we can, which we are. And so we've got plants that are building both ICE and EV. We've got plants that are just EV. We've got cell plants, we've got just ICE plants for now. And so we manage the transition with the marketplace, it's the bottom line. And so we're going to price aggressively with the foundation that we've laid. And to be able to do it's really important because at the end of the day, EVs and the friction points for mass adoption are around price. They are around range. They're around utility, they're all those things, right? And infrastructure. And so it's our job as an OEM to be able to offer, particularly General Motors really good vehicles at appropriate segment pricing. It doesn't cost anybody any more money than what they are paying to go into an ICE segment. And so it's our job to deliver the commercial value to be able to do that. Margins that were similar are in some cases, above what we did on an ICE vehicle. And that's the strategy, and that's what we're doing. And being opportunistic or episodic with pricing is not what we're doing here. We're in the long game, and we're going to create customers for life. And so that's the strategy. Hopefully that helps.

And that's one of the reasons why in the race to orders and volumes and reservations, we only sold one model here in the Cadillac LYRIQ. We could have sold far more than that. We could have reserved it. But we weren't going to make the mistake that others have, where we're going to go and have to change prices on somebody who's already ordered a vehicle because we're willing to take on some risk on behalf of the customer by selling forward. But the reality is with the way things were changing rapidly, we didn't really know how much it was going to cost to build a model '24 vehicle with the way things were changing. And we'd rather take the risk that the orders dry up or customers suddenly run away from EV transformation rather than put ourselves in a position where we're exposing the customer to our end capability to manage the production cost of the business. So first and foremost, the customer is always going to benefit from what we're doing going forward, even if that means we take fewer orders on reservations, the way we did for the LYRIQ. And you're going to see that continue to manifest for ourselves going forward.

The last thing I would say is the other thing is our dealers have been trained to really help the consumer understand the total cost of ownership because it's a very different equation. And so that factors in as well. So it's an education piece that our dealers are going to really assist us as well as EV Live helps people understand that as well.

Over here.

It's Philippe Houchois at Jefferies. I have a question on the -- you talked about the affordability or making sure that people can buy the cars. And are you prepared to increase the penetration of leasing at GMFS and it basically use the higher result that you can get on EVs because of the value of the materials and the batteries over time? So are you planning into increasing the asset base growth over the next few years?

Yes. I think at the end of the day, leasing is a great solution for customers that want to try it out, that might be afraid of some of the residual value pieces. And when you look at what the GMF team has done, they're really well positioned to do that. And we need to make sure that we've got the balance sheet and the capability to do it. So we've positioned them for growth, and I think they're executing really well, but lease is going to be a very valuable tool across EVs.

So am I right to assume that if you raise your CapEx guidance, you're also going to be able to get less dividend from GMFS as well. If anything, the flow of capital is going to go from GM to GMFS rather the other way around?

I wouldn't say that necessarily. I think GMF's balance sheet is really well positioned for growth. We significantly increased the dividend over the last couple of years because of the outperformance that we've seen, driven by the higher used car prices and what was going on in the business going forward. But we've been intentional not to fully utilize all that capacity because we don't want to whipsaw the dividends. But at the same time, we don't want to ever regret taking cash out of GMF only to have to put it back in. So we're focused on making sure that we have a balanced strategy of what they dividend back to us that allows then the balance sheet to be able to grow going forward.

All right. If I can add one question from Mary. It's probably no secret than the -- or fair to assume that the UAW is going to try to unionize more of the vertical integration that car makers are building today. How do you see the position of Ultium? You have shareholder -- LG is the other shareholder, does that make it more difficult or easier for the unions to try to drive the unionization of your battery capability.

So first off, we're supportive. We work hand-in-hand with the unions, and we're very supportive. We work jointly with them, and that's, I think, one of the things that allows us to trade to probably industry-leading levels of safety performance, industry-leading levels of quality. Those are 2 areas where we work together jointly, and I think we do quite well. So ultimately, when a plant organizes, it's the people who are there that make that decision, it's not our decision or the union's, it's the people. But again, we have a very good relationship with UAW. I'm on record of saying, we support those plants getting unionized as we go forward. We've also done a lot of education to make sure that the UAW and our members understand the affordability because that is more -- we brought -- we've in-sourced work, which is good for the country and good for our workforce. And if they're unionized good from a representative perspective, but we also have to make sure we're competitive. And so we regularly have those conversations as well.

Go to the back there, please.

Mike Ward from Benchmark. Two things. I think, Paul, in your presentation, you mentioned that you're going to pull forward some capital spending in the '23-'25 time period. Has that changed? I think it was $35 billion, you said a couple of years ago for EV/AV investment. Does that change that? Number one. And then as part of Doug's presentation, he mentioned that one of the benefits of the Ultium platform was to cut vehicle development time in half. So if I'm listening to that correctly, GM becomes less capital intensive post 2025. Or does it just free up capital to invest and maybe shift the culture in General Motors on how you invest and what businesses you invest in?

Yes, Mike, we -- I intentionally didn't bring this back to the $35 billion because the starting point versus what's been spent et cetera create confusion. But if you just look at the next 3 years, '23, '24, '25 and take the midpoint of that [ 11 to 13 ], that's $36 billion in and of itself. So depending on how you think about the starting point, it's a material increase over where we were in the $35 billion when we talked about that. But most of that has been what I would say, pull forward capital. It's not incremental capital over what we see over the next decade. It's really just accelerating that realization of where we see adoption curves going and making sure that we can stay ahead of it.

And the broader question of -- yes, we have accelerated the capital, as Paul said. As we move forward, we'll be able to value that. We do have a product portfolio that's beyond what Mark showed you into '26, '27 and beyond. So we'll evaluate the right product programs. We're all learning what customers want. We have some ideas that I think are very strong that will really continue to surprise and delight our customers. So we'll evaluate those. But also then it allows us -- that's the period where we're going to rapidly be able to fund and continue to fund BrightDrop, GM Defense, GM Energy, and those are additive businesses for us that really leverage the technology that we already have and actually have a very attractive margin profile as well. So I think you'll see us leveraging some of those other businesses. But believe me, we're going to make sure a lot of what we do, everything starts when we sell a vehicle or lease a vehicle. So we want to make sure that we have a winning portfolio, the best portfolio.

Colin Langan?

Colin Langan from Wells Fargo. I really want to follow up on Rod's question earlier. I've done some -- have experts do some work in a lot of the nickel-based chemistries. They were estimating at least earlier this year, we're at $150 per kilowatt hour with the raw materials being like over $100. So how do you get to the $70 or the $87 if raw material costs don't come down? Or do you just think those estimates are wrong? Or are there just a chemistry shift?

You want to take it Doug or you want me to...

So we do think there's going to be some moderation going forward. And we have long-term contracts with a lot of nickel mines. And so when we blend those contracts and we're [ susceptible ] to commodity prices like everyone is, right? So if this thing stays super high for super long, we won't hit the targets we talked about. We're kind of giving our best projection of where that's going to be, and that's what we're putting in our models. And in addition to that, though, we're -- so the number that Paul had in his pitch showed in 2025, $87 a kilowatt hour, okay? So that's our best projection of where we're going to be. And that's not just based on commodity prices, right? So that's scaling up our plans, that's continuing to improve our manufacturing efficiency and [ spot ] rates and all of those kinds of things. It's improving our designs. And so there's a lot that goes into the $87 a kilowatt hour other than just commodities. But yes, we think there's some moderation that's going to happen, and we've taken our best estimates, and we've put that in to the numbers we showed.

Let me spend just a second too to just try to probe a little bit deeper on the portfolio strategy and what we mean by that because this isn't a supply contract where we're just saying, give us this at spot, right? That's not what this is. We talk about partnerships. We don't talk about, here's a contract, right? Because what we're trying to do is we're trying to find opportunities to create value add for businesses, give them an opportunity to expand their infrastructure taking a piece of that incremental production going forward. And for that, we get a return on our capital, whether we're doing a prepay like we did with Controlled Thermal Resources or we're doing joint ventures or co-funding with some of the other bigger names that we've mentioned as well. So in that world, where pricing is, may not matter if you've got negotiated bands at what commodities might be or you're paying market less something because you're effectively getting a return on that capital that you've helped them fund or you're getting the benefit of a discount because you were there before anybody else was in certain circumstances. So this isn't a case where -- and I think what Doug and I are trying to get at, it's not a case where we require a material reduction in spot rates for commodities. And this is what building a partnership supply chain is all about and why we think the scale advantage that we have is going to be hard to replicate for some of those others that might not be able to do it at the same rate that we can.

And just a follow-up. Does that mean your current contracts, a good chunk are not based on spot? Because I thought a lot of lithium players, in particular, were moving more to less long-term contracts. So are majority of yours long term?

So the bulk of the deals that we've announced this year are sort of the 2025 and beyond because it requires some of that infrastructure going forward. So we do have some spot deals. We also have some other deals on shorter-term fixed price contracts, et cetera. So it's just a whole mix across the board on what we're looking at.

And just lastly, on the -- you talked about a lot of caveats were in the EV profitability. Any color on what is your assumption in terms of a price premium on EV? I've done this analysis myself, and that can obviously make a big difference if you're willing to pay more for an EV. And then the GHG credits, is that -- how should we think about that? Is that a couple of thousand dollars, $1,000 of help when you're doing the sort of apples-to-apples math? And then does it also apply to all the vehicles? Because I know for pickups, they have a large battery. So is it more challenging on the pickup side than the rest of the portfolio?

Yes. You want to talk about the GHG side, Doug, or...

The profitability we talked about doesn't include GHG. That's raw profitability, right?

No, in the EV performance metrics, we talked about includes the things like the GHG metrics. He was talking about the sensitivity on when you have more batteries, et cetera, across the board.

So maybe I missed the question a little bit. But obviously, our overall GHG compliance is significantly enhanced by the EVs we talk about. So as we -- certain vehicles have a different EV target -- I'm sorry, GHG target when you're talking about ICE vehicles and EVs are pretty great in that regard. So we're balancing across the corporation to meet our GHG and COP requirements with our ICE and EV fleets.

Yes. But it's not different than the way Tesla looks at their margins, for example, in that case, they're selling GHG credits to others. What we're doing largely is, first and foremost, we're going to sell it to ourselves to save that friction. But when we look at profitability and transparency, we're really doing that on an arm's-length basis. Similar to if we were to go buy credits from someone else, we just buy them from the EV portfolio. So there are benefits that's there for any EV automaker. The only difference is who's the end customer going forward. I don't know, Mark, if you wanted to make another comment about pricing strategy.

Pricing strategy. We know from customer research at least right now, people are willing to pay a premium for EVs. That's just customer research based. Are we taking that in every single product in every segment and taking advantage of that? The answer is no. And so we really look at each customer, each segment, the willingness to do that is a little bit different. And so you don't want to make generalizations on that. Again, we got to remain the automaker who reduces friction for buying an EV product of our own, whether it's through price, package, design, usability, range, all those things. So we'll continue to do that. But the market, to some extent, will set prices on things -- on a lot of these things no one else has. I mean no one has a Blazer or an Equinox, no one has all those things. And the truck piece of it, yes, they are bigger batteries. But the day we're going to start with fleet, for instance, on Silverado EV first. And that work truck is a really good price point for commercial buyers, and it doesn't have as much range as the RST, for instance. So there's ways to do that, too, around range and batteries that aren't all the same. And so we're very flexible on our pricing, on the capability of our vehicles, too.

Over here.

Matt Portillo from Tudor, Pickering, Holt. Just a quick question on China. It's obviously an important market for you from an EV perspective. Just curious if you could comment on how you think the introduction of some of the vehicles you announced today may affect the profitability for that partnership going forward and how we should think about the market opportunities out there?

So from a China perspective, we've seen really strong opportunity with Cadillac. So the LYRIQ is one of the first Ultium vehicles coming out. So we think that is -- and -- and because it's leveraging the Ultium platform, of course, the cells there are domestically supplied from CATL, as Doug mentioned. So we think there's going to be -- we're going to be able to continue to grow Cadillac with the LYRIQ and then some of the other portfolio vehicles that you saw that we'll have for Cadillac to round out as it is our first brand that's going to go all electric. In China, because the market is so large, there's kind of still a blending of both ICE and EVs, but we don't -- we see -- after the macro issues settle in China, we see an opportunity to continue to grow and get back to a better level than we are right now from the share that we get back on the equity piece of that -- or the dividend that we get back from the China operations, and we're working to grow that back and get that back to a level that we think is appropriate for where the business is. Clearly, electric vehicles are changed -- very much changing the landscape in China. It really has reset what consumers think from some of the domestic brands, but those were at lower levels, and that's why we especially think with Buick, with Cadillac, we have a place rightly placed where our brands have already been well established, and we can charge a premium for those vehicles, which will allow that business to be healthy and grow from a dividend perspective.

And then just a follow-up question. You talked a lot about the opportunity set to take market share on the coast. Just curious about Europe. It's obviously a market where you guys have exited, but the EV market is growing quite rapidly. And just curious if that's a real opportunity set for you over the next decade or so?

The answer is yes. It will be in a very different way than what we were there before, obviously. So we'll come with the Cadillac, for instance, the way that we architected Ultium and our platforms are both left and right hand drive. And so we've done that from day 1. So we have a pretty significant opportunity, we think, in Europe to take sort of a blank canvas approach to this, where we're going to grow whatever brand we put in there. We're going to grow it right. We're going to price it right. We're going to distribute however, right for those brands in that market. So we think it's a great opportunity for us, but we're going to do it right. So we've got a tremendous opportunity to get it really right. So yes, it's exciting.

I know somebody has a BrightDrop question out there.

Joseph Spak from RBC. I will ask a BrightDrop question, I think it's my second one. I guess the first question is just you guys have done an incredible amount of work on the EV value chain. And I think you've expressed a good amount of confidence that you can get to a fully compliant place. But like when you're talking about these 2025 targets, is there like a range you could give us about how much -- how compliant you will be with IRA? Do you have an estimate there? Because like some of the announcements like the Vale investments, those don't start until 2026, right? So I know you're fully sourced to '25, but what percent roughly do you think is [indiscernible].

Yes. Well, I don't want to get into that just yet because ultimately, we've got to see the regs and we've got to see it come out. It's changing over time. But what I'll tell you is that Doug and I participate with the supply chain team, corporate development team, finance team on a weekly basis to cover where we are on all of the critical materials across the board. And whether we have contracts that are signed now or things in process, everything we have is oriented against how quickly can we realize that full game going forward. So it varies from time to time because we're always looking at new deals. We're evaluating new counterparties. We're evaluating new projects about getting those online. And working quickly has to be the theme because there's a lot of infrastructure that has to be built, particularly in the processing side of things to be able to get the materials compliant with that going forward. So over time, we can give you more of that information, but we don't want to give any thoughts about kind of where we are right now because we think we're way ahead of many of our competitors.

Yes, that's just the point I wanted to make sure we reinforce. We think we're either in the lead or among a very few, maybe a couple of leaders with the work that we've already done and the foundation that we laid. So we're being very aggressive here.

Okay. And then the second question is, it's really bigger picture, I guess just, how are you thinking about communication with all of us in the room? Because you mentioned $50 billion in EV revenue by 2025, BrightDrop, $1 billion in '23 going to $10 billion, right? Like that -- those are sizable numbers, right? You break out Cruise today with much less revenues now, I think there's a reason for that because you want to sort of highlight the cost. But how are you thinking about breaking that out so we can track you against those KPIs that you laid out on a more regular basis? And then, I guess, building on top of that, specifically the BrightDrop, how do you think about that over time as it does become pretty sizable? I think it has some much different characteristics from economic sensitivity and sort of more white space than the rest of your business for investors who might want a more direct access to that type of story.

You saved yourself at the end because I was going to say that was more of a financial reporting question than it was BrightDrop, but might have saved yourself at the end for Travis. As I mentioned in the opening before I set up with some of those KPIs, we commit to continuously updating and regularly updating where we are on the metrics that we shared today, irrespective of how we report the financials. We can give some color on how we're measuring against those things. So ultimately, we're looking that over time. But we're running the business incredibly well right now, and I think we're executing well. So what we want to make sure we do is we don't disrupt that for the sake of financial reporting and what it might do, just continuing to execute going forward. So we'll report regularly against some of these metrics from time to time. They're not going to change every quarter. And I don't think we need to report some of those every quarter, but you'll see us talking about those trends.

And BrightDrop will be included in that.

Yes, absolutely. You want to talk a little bit about BrightDrop future growth, where you see it going?

Well, I mean, I guess what I would say is we see a huge growth potential here, obviously, with BrightDrop, and we have set BrightDrop up to run a little bit differently. And in some ways, it's becoming a little bit of a laboratory for the rest of the company to try out different approaches across the board. And I think that's working really well. We're seeing learnings from BrightDrop that are rolling into other parts of the company. At the same time, I think what's really clear to me, and I -- this is not my first business that I built, there are substantial benefits for us being connected to General Motors because of all of the things that General Motors does well on the manufacturing side, on the supply chain side, access to the Ultium platform. The speed at which we're able to do this. If you look at the other sort of EV start-ups in the space and Elon tweets all the time about how hard scaling is and this is where you're trying to see a lot of people stumble. We don't have to worry about that. Scale is the thing that General Motors does better than anyone. They know how to do this really well. So it's really allowing us to accelerate and go much faster than we otherwise might. So right now, I think we're really happy with the way it's working.

And I just want to maybe broaden that out a little bit. First, being able -- I think there was a lot of question when we first acquired Cruise of would we take this 40-person unit and hug it to death with a big company. We didn't do that, and we've let that run independently, and I think the results speak for themselves of we are the only AV company that is out there about ready to be launching in -- operating in 3 different markets and already generating revenue. We learned a lot with that, and so that's enabled us -- with BrightDrop being a little bit different because it is a vehicle, but it has a software component as well headquartered in the Valley that allow it to have enough independence but always leverage the benefits and the scale that General Motors can provide to it. Our Board and this leadership team, we regularly evaluate what is going to be the best thing to do to unlock shareholder value for you, our shareholders. We continue to evaluate that on multiple dimensions of the businesses we own and how we run them. So trust, that is a regular dialogue among management, annually reviewed or more frequently if necessary at the Board, making sure we're looking at unlocking long-term value.

And Joe, one thing I would say from an IR perspective, we are committed to transparency, right? I think for any company to build credibility with the Street, which ultimately is reflected in valuation, you have to be transparent. You then have to execute on whatever KPIs you provide. And I think this team is definitely committed to doing that. Next, over here. Again.

Stanley [indiscernible] at Barclays. You've repeatedly noted that EV is going to be funded by ICE. So the question is, -- this is a large step up in CapEx, the step up versus what you're producing $9 billion to $10 billion is certainly a step-up versus the CapEx profile you've laid out prior to that, which I think was like $7 billion a year. So how firm or rigid is this CapEx profile? And how do you think about that if we're going into a recessionary environment and there's some pressure on the EBIT profile? And then within that, how does your view on Cruise funding play into this given you have some scaling had? And maybe just a comment on cash return to shareholders as you started that this year.

Yes.

No, you can go.

So I think as we look at it, one of the things that we want to make sure people understand and we demonstrate it is that we can continue to invest in the business during a downturn. Now if it's a severe downturn, will we prioritize some things and look at it across the board, of course. But we think the strength of the business and what we've built in with what Paul shared today, we're thinking it's a 15 million unit market. And that's what we plan for. But with that, we feel we can reinvest in the business because we see these great opportunities while maintaining the dividend and depending on how what the outcomes are continuing to reinvest. Cruise, one of the things you have to think about is, they scale -- one of the advantages of being part of General Motors is they have a $5 billion line of credit from GMF. And so yes, there'll be a little bit more as they get their operation piece going. The vehicles can leverage that line of credit that we have. So we're -- and believe me Kyle is very -- one of the best allocators of capital and making sure every dollar goes as far as it possibly can. So we're going to continue to go to make sure we don't constrain the commercialization because we have a lead right now from an autonomous perspective. Those who are writing that it's not going to work and it's decades off, haven't taken a right in the vehicle. I mean we're doing it right now. And that's a lead that we think is, over time, going to change the way people move and deliver things. So it's not only people movement, it's goods movement. So we're going to evaluate those. And again, we believe we have what we need to do the capital, and we'll continue to look at what are the best structures to be efficient from how we allocate capital to these other businesses.

Well, I think just to drill down on that, too, because '23 is obviously a year that everybody has a lot of concerns about going forward. But if you look at our cash generation this year, we've got -- we just said $10 billion to $11 billion of free cash flow this year on $9 billion to $10 billion of capital expenditures. So the cash generation of the company today is incredibly strong, right? So your first shock absorber before you start to slow down the business, is that pile of free cash flow. Now we've diligently allocated some of that to shareholders, but that serves us the safety net. So you can talk about a sizable decline in profitability before we get to that level where, okay, I'm faced with a decision, do I borrow or do I slow down CapEx. We've got a lot of headroom to be able to do that. It doesn't mean that things can't happen fast in this business. We know that. But this is our comfort level going forward. And then as far as the flexibility going forward, there's obviously a lot of flexibility in what we look at 2 and 3 years down the road from that standpoint. So what we're doing is we're just kind of tackling this 1 year at a time. We've got -- we feel like we've got good line of sight into the plan that we're constructing for 2023 that will allow us to be able to invest at that higher level, while still generating free cash flow going forward. And if we see a material deterioration, we'll adjust and we'll pivot according to how we best see the prioritization.

And the second is more of, I'd say, an organizational question. We've obviously seen some of your competitors ring-fence their ICE and EV teams, and I think the idea is that by ring-fencing this accelerates development. I think you guys made the decision like a few years ago to actually aggregate all of your propulsion under 1 team. So maybe you can give us a sense why this type of organizational decision has actually worked out in your favor rather than ring-fencing the different teams?

Yes. This was a couple -- a few years ago, actually in 2018, where we took product development and what was powertrain as sort of an island of dynos and propulsion and really deep expertise in internal combustion engines and combined it. And Doug runs it now, but that was -- we thought was going to be an emotional event, but it turns out that a lot of those engineers love designing electric motors. They love the challenge of our structure that goes around the battery packs, the controls of the battery packs. Some of them are Ultifi engineers now because of the software, we're carrying software between the groups now. I can't understand how this would operate as a ring-fenced organization from an engineering technical standpoint and not be completely duplicative. I can't understand that because they're going to work on great ICE products like you saw today, the great EV products. Whatever we need, our expertise is very deep. And Doug went through some of the demographic changes of the skill sets we're hiring. But I can tell you that this is a very efficient attack-focused task-focused set of technical skill sets that love doing whatever program we're on them as long as we've got an amazing styled vehicle that we know is going to be a home run, which is what we're doing. And so that bleeds through the organization like you can't believe. And that's why the people that we hire want to come work for us because they know they're going to be working on exciting things, exciting technology, cutting edge software, cutting-edge everything, right? And they're going to be doing on the next one. And they're not going to be island as an EV activity and they're not going to be island as an ICE activity. They're going to be island in GM doing the coolest things in the industry, and that's the way we approach it, and it's very lean and efficient. And I just can't understand -- because we look at this very deeply to your point, you know this. And I just can't understand how that will operate.

There's a significant portion of the vehicle that's instrument panels and fenders and headlights and wiring harnesses and that's the same people. Those are the same great people. So we enabled a battery electrification software team. And what's actually really interesting, Mark will allude to it, is we took what used to be the transmission organization, and they've now moved into the drive unit organization because prismatics and gears and things are very much alike. So we funded the electrification by moving a lot of the transmission team into the drive unit team, same thing from a software, I'm going to talk about both of those. We're in process now on the engine team. So we started to move engine team folks because that's chemistry, right? It's combustion and so a lot of that capability has actually funded our move to EV. So I agree completely. We just don't -- we do have what I would call the chief engineers and the program management, there's a separate team that manages all the electrification programs, so they don't get confused with the ICE programs. Other than that, the rest of the organization is much more homogeneous.

I would say on a manufacturing basis too, with Gerald, you see us investing in Toledo, our casting plant or whatever. This is not that different, okay? These are drive units, okay? Whether they're transmission and hydraulics, with [ valve ] bodies and springs and all of that or they're electric drive units, which we have great expertise in over a long period of time. So how good would it be to be in Toledo working on both, right? And people are excited about that. And so it's -- again, if they're going to put it in a separate facility or a walled-off piece, a transmission plant to do a drive -- electric drive unit, that makes no sense to me. And we got great synergy with great people.

I totally agree. But the last thing I would say is when everybody comes to work at General Motors, we take great care in making sure you are all part of the journey to get us to an all-electric future, zero [indiscernible] and zero emissions. And if you're working -- if you're the chief engineer for an ICE product, you're in for full-size structure helping to fund it. But everybody realizes they have a place, and that kind of workplace of choice and they feel like I'm a part of the mission as opposed to e separated. And what's the mindset of that team that knows I'm in engineering, what's going away. So again, we -- it motivates the engineers and maybe because 3 of us are engineers. We know if you come to work every day, you think what you're working on is cool and important, you just -- there's a bounce in your step.

So we've got time for one more.

Finance jobs are pretty cool too.

Yes. Finance always has a bounce in their step.

Always. That never goes away.

James Picariello of BNP Paribas. On the regional fulfillment centers, I think the map showed 3 locations to date. What's the targeted number by 2025 in terms of where you want to get that to? And how does that translate to your targeted day supply inventory for dealers?

Right. Well, we're now -- just now rolling out the DRP piece of it first. So we have to get the DRP in place where the dealers who are going to participate in it to actually take advantage of those fulfillment centers. So we're right in the middle of that right now. And so we're not done. And Cadillac will be the first execution of those DRP pieces. And I would guess we would select those fulfillment centers around those footprints. And so that's very key. And so you can't sort of guess at what those are going to be or what the advantage is or where we should put them. But they're coming online as we redo the DRP agreements with all of our dealers. So not done yet, more to come.

And so before I guess [indiscernible] end of questions, I just want to say, first of all, thank you very much for coming and spending your day with us. I do hope you have the opportunity to drive or ride in some of our vehicles or at least walk around. Please, if you haven't already, take a look at the vehicles on the floor right here. Again, very different from a market perspective, very, very important for General Motors' future. So just to summarize, if you think about where General Motors is at, where are unique in that for a full line manufacturer because 3-plus years ago, we started working on Ultium, we now are positioned to have a portfolio of vehicles that meets the customer again, not at the single-digit margin for North America sales, but getting to 40%, 50%, 60% sales. We are going to have the portfolio to do that. We are going to get to low to mid-single digits by 2025 without the IRA. We think that's going to accelerate us getting to ICE like margins. We have other growth businesses when you think about BrightDrop, when you think about GM Defense, when you think about our GM Energy solution. Then when you put on top of it, what we'll share in kind of the next Investor Day, an update on the software-defined vehicle and where we're headed there, you're going to see that's just another additive piece because the vehicle and what we're working on is really transforming this company into a software-first organization. So I guess I'll repeat what Mark said at the end of his session. First of all, you see the commitment of this team. You see the beautiful products that we have. I would strongly recommend don't bet against us because we are going to execute and we are going to demonstrate the leadership in EV that we have demonstrated for decades in ICE. So thank you very, very much.

So this concludes our presentation. You'll see portions of today's presentation posted to our website shortly. I just personally want to say thank you to everyone in the room as well as those listening online. I also want to thank the presenters for taking the time and I also want to give a special thank you to all the people behind the scenes. They really made this happen. So thank you to everybody. Really appreciate your hard work.