WEBVTT - Surveillance Special: GM CEO Mary Barra on Hybrids, EV Adoption

0:00:00.160 --> 0:00:02.800
<v Speaker 1>Please to say. Joining us in the Bloomberg Savantage studio

0:00:03.080 --> 0:00:07.600
<v Speaker 1>alongside me is GMCO Mary Barra. On the later results

0:00:07.640 --> 0:00:10.840
<v Speaker 1>with GM stock at the moment positive by about seven percent.

0:00:10.920 --> 0:00:13.760
<v Speaker 1>Mary Barr, the General Motors Chair and CEO, joined us. Now, Mary,

0:00:13.800 --> 0:00:15.520
<v Speaker 1>wonderful to catch up with you. A better story to

0:00:15.560 --> 0:00:18.800
<v Speaker 1>tell this morning. Let's start with that story. What's underpending

0:00:18.800 --> 0:00:20.840
<v Speaker 1>these higher profits for twenty twenty four.

0:00:21.840 --> 0:00:25.040
<v Speaker 2>Well, if you look at the strong twenty twenty three results,

0:00:25.040 --> 0:00:27.639
<v Speaker 2>we had very strong internal combustion engine sales and we

0:00:27.720 --> 0:00:32.120
<v Speaker 2>had strong EV sales from our Bolt EV and EUV.

0:00:32.560 --> 0:00:34.400
<v Speaker 2>But as we go into twenty four, we're going to

0:00:34.479 --> 0:00:36.479
<v Speaker 2>build on that strength and we think twenty four can

0:00:36.520 --> 0:00:38.920
<v Speaker 2>be another strong year because we're going to be building

0:00:38.960 --> 0:00:42.279
<v Speaker 2>many more ultim based evs. We had a constraint with modules.

0:00:42.600 --> 0:00:45.000
<v Speaker 2>We have addressed that. We're on track for the first

0:00:45.040 --> 0:00:47.760
<v Speaker 2>month and by the middle of the year that should

0:00:47.800 --> 0:00:49.879
<v Speaker 2>be well behind us. So that's going to allow us

0:00:49.920 --> 0:00:53.640
<v Speaker 2>to build many more of the existing vehicles like the

0:00:54.240 --> 0:00:59.040
<v Speaker 2>Cadillac Lyric and the GMC Hummer EV, the Silverado EV

0:00:59.160 --> 0:01:01.680
<v Speaker 2>work truck, etc. And then this year we're also going

0:01:01.720 --> 0:01:07.600
<v Speaker 2>to be launching this Chevy Equinox EV along with a

0:01:07.680 --> 0:01:10.600
<v Speaker 2>CRA EV. So we have many new evs coming out,

0:01:10.920 --> 0:01:12.240
<v Speaker 2>and so it's going to be a strong year for

0:01:12.319 --> 0:01:15.080
<v Speaker 2>us from an EV perspective as well, and we've indicated

0:01:15.520 --> 0:01:17.720
<v Speaker 2>that in the second half of the year we expect

0:01:17.920 --> 0:01:20.560
<v Speaker 2>our EV portfolio to be variable profit break even.

0:01:20.920 --> 0:01:23.200
<v Speaker 1>Mary, Let's talk about the EV market, because you are

0:01:23.240 --> 0:01:25.360
<v Speaker 1>optimistic and constructive at the same time, there's been some

0:01:25.480 --> 0:01:28.040
<v Speaker 1>setbacks over the last few months of thinking of hurts,

0:01:28.240 --> 0:01:30.760
<v Speaker 1>they need to dune twenty thousand evs. More recently, a

0:01:30.760 --> 0:01:33.480
<v Speaker 1>competitive forward had to cut the workforce making the electric

0:01:33.800 --> 0:01:36.240
<v Speaker 1>F one fifties. What do you think is behind the

0:01:36.319 --> 0:01:39.039
<v Speaker 1>slowdown and EV growth more broadly over the last few

0:01:39.080 --> 0:01:39.839
<v Speaker 1>months the last few.

0:01:39.800 --> 0:01:45.080
<v Speaker 2>Quarters, Well, there definitely is a slowdown of EV adoption,

0:01:45.200 --> 0:01:48.360
<v Speaker 2>although I think this transformation of this magnitude was never

0:01:48.400 --> 0:01:50.880
<v Speaker 2>going to be completely linear. I think one of the

0:01:50.920 --> 0:01:54.520
<v Speaker 2>important things is continuing to build out the charging infrastructure,

0:01:54.680 --> 0:01:57.920
<v Speaker 2>but it's also about having purpose built, ground up evs

0:01:58.000 --> 0:02:01.080
<v Speaker 2>that have all the performance requirements. Because as we continue

0:02:01.080 --> 0:02:03.560
<v Speaker 2>to grow in the EV market, and you know, outside

0:02:03.720 --> 0:02:06.880
<v Speaker 2>analysts expect that this next year, even the lowest is

0:02:06.920 --> 0:02:10.080
<v Speaker 2>that it'll be an ev penetration of ten percent versus

0:02:10.080 --> 0:02:13.440
<v Speaker 2>this year of seven percent. So although it's slowing, if

0:02:13.480 --> 0:02:15.079
<v Speaker 2>we were to grow from seven to ten percent, that

0:02:15.120 --> 0:02:18.359
<v Speaker 2>would still be significant and a record year for evs,

0:02:18.680 --> 0:02:21.320
<v Speaker 2>and to participate in that this year, we're well positioned

0:02:21.720 --> 0:02:24.360
<v Speaker 2>with a portfolio of purpose built evs.

0:02:24.560 --> 0:02:26.120
<v Speaker 1>Mary, you and I have always talked about where the

0:02:26.160 --> 0:02:28.360
<v Speaker 1>market is and where it's going. There was a belief

0:02:28.360 --> 0:02:29.840
<v Speaker 1>for a while that we could move from the internal

0:02:29.840 --> 0:02:32.880
<v Speaker 1>combustion engine to evs, and now it feels like there's

0:02:32.880 --> 0:02:35.680
<v Speaker 1>an interim step towards hybridge. You've been reluctant in the

0:02:35.720 --> 0:02:38.040
<v Speaker 1>past on the ONIXT core you went to tain that idea.

0:02:38.320 --> 0:02:39.320
<v Speaker 1>What's changed your mind?

0:02:41.480 --> 0:02:44.080
<v Speaker 2>Well, you know again, as we're going through this transformation,

0:02:44.280 --> 0:02:46.520
<v Speaker 2>a lot has changed. I think, you know, a few

0:02:46.600 --> 0:02:48.639
<v Speaker 2>years back when we made that statement, I think we've

0:02:48.639 --> 0:02:52.040
<v Speaker 2>thought we'd be farther along on the charging infrastructure again

0:02:52.720 --> 0:02:55.720
<v Speaker 2>across the entire country. But I also think the regulatory

0:02:55.760 --> 0:02:58.320
<v Speaker 2>environment has changed to be even more stringent, and so

0:02:58.360 --> 0:03:01.160
<v Speaker 2>as we get there within now hybrids are going to

0:03:01.160 --> 0:03:03.920
<v Speaker 2>play a role. We already have the technology, it's been

0:03:03.919 --> 0:03:06.040
<v Speaker 2>deployed in other regions, so we'll apply it in North

0:03:06.080 --> 0:03:09.440
<v Speaker 2>America at a timeframe that we think is important primarily

0:03:09.480 --> 0:03:12.520
<v Speaker 2>from a regulatory environment as we move forward.

0:03:12.280 --> 0:03:14.120
<v Speaker 1>Can we talk about that time frame just a little bit.

0:03:14.160 --> 0:03:16.360
<v Speaker 1>How quickly can you get those cars to market? Given

0:03:16.360 --> 0:03:18.840
<v Speaker 1>as you've just said, you have that technology ready to go.

0:03:21.000 --> 0:03:24.440
<v Speaker 2>Well, we're going to be launching those vehicles, the hybrids,

0:03:24.800 --> 0:03:28.320
<v Speaker 2>in key segments of our portfolio, but we haven't put

0:03:28.400 --> 0:03:31.400
<v Speaker 2>specific plans out. We'll be filling that in more later

0:03:31.480 --> 0:03:34.800
<v Speaker 2>as we move on, because twenty four is really a

0:03:34.880 --> 0:03:38.600
<v Speaker 2>year to focus on our EV production. Again, we've seen

0:03:39.600 --> 0:03:43.400
<v Speaker 2>since last September the lyric. As we've been able to

0:03:43.440 --> 0:03:46.320
<v Speaker 2>build more vehicles, demand keeps growing. We've even had a

0:03:46.360 --> 0:03:49.600
<v Speaker 2>strong January that's matching we believe will match December even

0:03:49.640 --> 0:03:52.280
<v Speaker 2>with all the weather challenges we've seen throughout the country.

0:03:52.840 --> 0:03:55.600
<v Speaker 2>We have one hundred thousand either orders or reservations for

0:03:55.640 --> 0:03:58.000
<v Speaker 2>our EV trucks that we're going to fulfill between twenty

0:03:58.000 --> 0:04:00.760
<v Speaker 2>four and twenty five. So again, when you think about

0:04:00.840 --> 0:04:03.280
<v Speaker 2>new purpose built EV's, I think we're in a different

0:04:03.280 --> 0:04:06.160
<v Speaker 2>position than some if for some reason we don't see

0:04:06.160 --> 0:04:09.320
<v Speaker 2>that EV demand materialize. We've got the flexibility with two

0:04:09.360 --> 0:04:11.160
<v Speaker 2>plants that can build both ice in EV.

0:04:11.560 --> 0:04:13.720
<v Speaker 1>That just raises the question again, Mary, how quickly you

0:04:13.760 --> 0:04:15.320
<v Speaker 1>can deploy that? Is that something you can do in

0:04:15.360 --> 0:04:17.240
<v Speaker 1>a quarter, something that has to take place over the

0:04:17.240 --> 0:04:19.720
<v Speaker 1>space of a year. How long does that take?

0:04:21.680 --> 0:04:24.479
<v Speaker 2>Again, we're not giving specific details and when the hybrid

0:04:24.760 --> 0:04:28.000
<v Speaker 2>vehicles will come out. That will follow later, but it

0:04:28.040 --> 0:04:31.440
<v Speaker 2>will be timed, not because we have such strong evs

0:04:31.520 --> 0:04:34.320
<v Speaker 2>right now, it will be timed later when we see

0:04:35.720 --> 0:04:38.719
<v Speaker 2>hybrid's plain an important role in meeting the regulatory environment.

0:04:38.800 --> 0:04:40.719
<v Speaker 1>You'll have to forgive me for sounding slightly combative, but

0:04:40.720 --> 0:04:42.560
<v Speaker 1>I'm just trying to understand myself. So Mary, help me

0:04:42.640 --> 0:04:45.159
<v Speaker 1>understand just a little bit more. If EV's really strong,

0:04:45.360 --> 0:04:48.320
<v Speaker 1>why are we entertaining hybrids? If that's the aultimate goal

0:04:48.839 --> 0:04:51.560
<v Speaker 1>and it's going to be a distraction where entertain hybrids?

0:04:52.920 --> 0:04:55.520
<v Speaker 2>Well, as I've said, we've seen EV demand slowly. We

0:04:55.600 --> 0:04:58.200
<v Speaker 2>think there's still an opportunity for general motors. But we

0:04:58.240 --> 0:05:01.120
<v Speaker 2>think if you think about it, we're seven percent this year,

0:05:01.640 --> 0:05:04.039
<v Speaker 2>getting all the way to one hundred percent. There's going

0:05:04.120 --> 0:05:06.880
<v Speaker 2>to be a lot of adoption and there's some customers

0:05:06.880 --> 0:05:10.080
<v Speaker 2>with their use cases are more comfortable with a vehicle

0:05:10.120 --> 0:05:14.599
<v Speaker 2>that has two propulsion systems, the electric and internal combustion engine,

0:05:14.680 --> 0:05:17.160
<v Speaker 2>and so we're responding to that. A lot is what

0:05:17.240 --> 0:05:19.359
<v Speaker 2>is going to guide. This is related to getting a

0:05:19.440 --> 0:05:24.039
<v Speaker 2>robust charging infrastructure. So we're keeping our options open and

0:05:24.240 --> 0:05:26.920
<v Speaker 2>we're going to look to what the market wants. We've

0:05:26.920 --> 0:05:29.280
<v Speaker 2>already seen hybrid demand go up and down over the

0:05:29.360 --> 0:05:32.080
<v Speaker 2>last few years, so you know, I don't think it's

0:05:32.120 --> 0:05:35.640
<v Speaker 2>going to be you know, a long term stable growth either.

0:05:35.800 --> 0:05:38.200
<v Speaker 1>Got it. You've always been pragmatic about the situation. Let's

0:05:38.240 --> 0:05:41.160
<v Speaker 1>talk about the situation with competition as well. They test

0:05:41.160 --> 0:05:43.480
<v Speaker 1>the CEO Ela Musk said just last week, the Chinese

0:05:43.560 --> 0:05:47.599
<v Speaker 1>order makers will demolish that global competition without tariffs. We

0:05:47.720 --> 0:05:49.960
<v Speaker 1>noted in the last few months that GM sold few

0:05:50.040 --> 0:05:52.120
<v Speaker 1>vehicles last year in China that in the US for

0:05:52.160 --> 0:05:55.000
<v Speaker 1>the first time I think since two thousand and nine. Mary,

0:05:55.000 --> 0:06:00.240
<v Speaker 1>How difficult is it to compete in China at the moment, Well.

0:06:00.320 --> 0:06:03.040
<v Speaker 2>The China market is under tremendous change. There's over one

0:06:03.080 --> 0:06:05.920
<v Speaker 2>hundred domestic EV companies that have started up. I think

0:06:05.960 --> 0:06:08.840
<v Speaker 2>important to note many of them are not profitable. We

0:06:08.920 --> 0:06:12.599
<v Speaker 2>are changing our business, uh and we need to get

0:06:12.640 --> 0:06:15.120
<v Speaker 2>more evs out that can compete. But I think when

0:06:15.120 --> 0:06:17.520
<v Speaker 2>you look at the you know, the intense price competition

0:06:17.600 --> 0:06:19.919
<v Speaker 2>that you're seeing in China right now, that's not sustainable

0:06:19.920 --> 0:06:23.479
<v Speaker 2>for any company. And so we're positioning for where GM

0:06:23.560 --> 0:06:25.920
<v Speaker 2>has to be to compete in a very different market

0:06:26.080 --> 0:06:29.480
<v Speaker 2>with many more DOMESTICI EV competitors. But we still think

0:06:29.520 --> 0:06:32.080
<v Speaker 2>there's a place and a growth opportunity there as we

0:06:32.120 --> 0:06:34.680
<v Speaker 2>move forward, but it'll be different than it was. You know,

0:06:34.800 --> 0:06:36.320
<v Speaker 2>three four or five years ago, you've.

0:06:36.160 --> 0:06:38.440
<v Speaker 1>Said you're evaluating your business there. Could you have this

0:06:38.520 --> 0:06:40.880
<v Speaker 1>understand a little bit more? We ultimately that statement, Mads,

0:06:40.920 --> 0:06:43.040
<v Speaker 1>What does that mean to evaluate your business on the

0:06:43.080 --> 0:06:43.800
<v Speaker 1>ground in China?

0:06:45.560 --> 0:06:48.080
<v Speaker 2>Well, we have to evaluate with how much the market

0:06:48.160 --> 0:06:51.240
<v Speaker 2>is changing and with the different competition competition, we have

0:06:51.279 --> 0:06:53.560
<v Speaker 2>to understand where can GM play and win and that's

0:06:53.560 --> 0:06:55.799
<v Speaker 2>where we'll deploy our capital. We have a very strong

0:06:55.839 --> 0:06:58.560
<v Speaker 2>partner with SAIC and so we're going to work with

0:06:58.600 --> 0:07:01.440
<v Speaker 2>them together. We have been to make sure we have

0:07:01.520 --> 0:07:05.920
<v Speaker 2>a strong business going forward. That's getting Ultium evs launched

0:07:05.960 --> 0:07:09.880
<v Speaker 2>there and we're considering other products as well. So more

0:07:09.920 --> 0:07:12.080
<v Speaker 2>to come on the China story, but we're going to

0:07:12.080 --> 0:07:13.960
<v Speaker 2>make sure we set up the business with this very

0:07:14.040 --> 0:07:15.400
<v Speaker 2>dynamic market to succeed.

0:07:15.560 --> 0:07:18.280
<v Speaker 1>Mary, let's talk about competition domestically at home as well.

0:07:18.360 --> 0:07:21.760
<v Speaker 1>That statement for Elon muss that ultimately Chinese automakers will

0:07:21.760 --> 0:07:24.400
<v Speaker 1>demolish their global competition without tarif. Do you have a

0:07:24.400 --> 0:07:26.400
<v Speaker 1>position on that. Do you feel the same way? Is

0:07:26.440 --> 0:07:29.160
<v Speaker 1>that something that the automakers in America need to be

0:07:29.200 --> 0:07:31.640
<v Speaker 1>able to compete successfully? We need to put the barriers up.

0:07:33.440 --> 0:07:36.480
<v Speaker 2>Well, I think across the board. You know, when you

0:07:36.520 --> 0:07:38.920
<v Speaker 2>look at how do you win in this business, it's

0:07:38.920 --> 0:07:42.080
<v Speaker 2>by having beautifully designed products that meet customers need, that

0:07:42.160 --> 0:07:45.920
<v Speaker 2>have the right functionality, right software, right technology, add a

0:07:46.000 --> 0:07:48.320
<v Speaker 2>very competitive price point. And that's why GM has been

0:07:48.360 --> 0:07:51.400
<v Speaker 2>so focused on taking cost out and being more effective

0:07:51.480 --> 0:07:54.520
<v Speaker 2>with our capital. And so that's what you need to

0:07:54.560 --> 0:07:56.320
<v Speaker 2>do to win. I would say that you do need

0:07:56.360 --> 0:07:59.400
<v Speaker 2>a level playing field, and I believe with our portfolio

0:07:59.520 --> 0:08:01.559
<v Speaker 2>in many of the markets we compete around the globe,

0:08:01.760 --> 0:08:03.920
<v Speaker 2>if there's truly a level playing field, we have a

0:08:03.960 --> 0:08:05.680
<v Speaker 2>strong portfolio and we're going to do well.

0:08:05.760 --> 0:08:08.000
<v Speaker 1>The stock is doing well this morning, hire by about

0:08:08.080 --> 0:08:10.440
<v Speaker 1>six or seven percent. I wanted to finish up here.

0:08:10.760 --> 0:08:13.640
<v Speaker 1>You've had some run ins with activists shareholders during your tenure.

0:08:13.640 --> 0:08:15.920
<v Speaker 1>You've got plenty of experience with this back in twenty fifteen,

0:08:15.920 --> 0:08:19.040
<v Speaker 1>I think twenty seventeen again with David Idhorn. Are you

0:08:19.280 --> 0:08:21.280
<v Speaker 1>all concerned about in Vesta's losing patients with some of

0:08:21.320 --> 0:08:24.160
<v Speaker 1>these bets on technology with Cruise, on the EV transition

0:08:24.240 --> 0:08:27.240
<v Speaker 1>as well and ultimately facing that all together again or

0:08:27.240 --> 0:08:29.600
<v Speaker 1>do you think the capital re term program announced only

0:08:29.600 --> 0:08:31.640
<v Speaker 1>a few months ago, together with a share pace performance

0:08:31.640 --> 0:08:33.640
<v Speaker 1>and a better outlook, we'll keep those people away.

0:08:35.880 --> 0:08:38.200
<v Speaker 2>Well. Again, we've got to run the business well. Last

0:08:38.240 --> 0:08:40.680
<v Speaker 2>year we had some disappointments in EV and I think

0:08:40.679 --> 0:08:43.960
<v Speaker 2>that created some cause for concern as well as some

0:08:44.000 --> 0:08:46.640
<v Speaker 2>of the challenges at Cruise. We're addressing both of them.

0:08:46.720 --> 0:08:48.320
<v Speaker 2>I think this is going to be a breakout year

0:08:48.320 --> 0:08:51.600
<v Speaker 2>for ultium based evs and we're going to demonstrate that

0:08:51.640 --> 0:08:54.319
<v Speaker 2>this year. We have taken the steps necessary and the

0:08:54.440 --> 0:08:58.520
<v Speaker 2>underlying technology of our autonomous technology with Cruse is strong,

0:08:58.800 --> 0:09:01.520
<v Speaker 2>and so we're revising the plan that will work very

0:09:01.559 --> 0:09:04.480
<v Speaker 2>closely with local, state, and federal regulators as well as

0:09:04.559 --> 0:09:07.079
<v Speaker 2>first responders. So I think there's a very strong growth

0:09:07.080 --> 0:09:10.319
<v Speaker 2>opportunity there and just let me say from an autonomous perspective.

0:09:10.679 --> 0:09:13.720
<v Speaker 2>You know the benefits of autonomous are safety when you

0:09:13.760 --> 0:09:16.360
<v Speaker 2>look at and saving lives when you look at today.

0:09:16.640 --> 0:09:18.800
<v Speaker 2>I think the latest some of the latest statistics show

0:09:18.840 --> 0:09:21.520
<v Speaker 2>that ninety percent of fatalities on US roads are caused

0:09:21.520 --> 0:09:25.280
<v Speaker 2>by human error. So this technology holds great promise for

0:09:25.320 --> 0:09:27.880
<v Speaker 2>safer travel. So we're going to continue to invest in that,

0:09:27.960 --> 0:09:29.560
<v Speaker 2>but we're going to be measured and make sure what

0:09:29.600 --> 0:09:32.160
<v Speaker 2>we deploy we're going to generate returns on. So it's

0:09:32.200 --> 0:09:33.160
<v Speaker 2>ours to execute.

0:09:33.320 --> 0:09:35.079
<v Speaker 1>Mary. I know you're non stop this morning and you've

0:09:35.080 --> 0:09:37.080
<v Speaker 1>got a run. We appreciate your time here at Bloomberg.

0:09:37.080 --> 0:09:39.000
<v Speaker 1>Thanks for being with us. Mary Power there, the General

0:09:39.040 --> 0:09:40.600
<v Speaker 1>Motors chair and CEO,