Good afternoon, and welcome to the General Motors Company Fourth Quarter 2021 Earnings Conference Call. During the opening remarks, all participants will be in a listen-only mode. After the opening remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded, Tuesday, February 1, 2022. I would now like to turn the conference over to Rocky Gupta, Treasurer and Vice President of Investor Relations.

Thanks, Jordan. Good afternoon, and thank you for joining us as we review GM's financial results for the fourth quarter and calendar year 2021. Our conference call materials were issued earlier this afternoon and are available on the GM Investor Relations website. We are also broadcasting the call via webcast. I'm joined today by GM's Chair and CEO, Mary Barra; GM's CFO, Paul Jacobson; GM Financial CEO, Dan Berce; and Cruise Co-Founder, Kyle Vogt. Kyle will be available to speak about Cruise's exciting progress in the Q&A portion of the call. Before we begin, I would like to direct your attention to the forward-looking statements on the first page of the chart set. The content of our call will be governed by this language. We'll now turn the call over to Mary.

Hey, thanks, Rocky, and good afternoon, everyone. Thanks for joining us. Before we get into our 2021 results and 2022 outlook, I want to start with some exciting news from Cruise, which is one of our most significant growth opportunities. Kyle, Dan Kan, Gil West, and the entire Cruise team are doing great work, and they just delivered a key milestone in commercializing the Cruise rideshare service. As Kyle has shared, Cruise team members have been taking fully driverless rides in San Francisco since November to demonstrate and refine the software and hardware ecosystem we have created together. In fact, they have logged over 20,000 miles and completed more than 600 trips. I rode in a driverless Cruise a couple of weeks ago, and I can tell you it was the highlight of my career as an engineer and as the leader of General Motors. The ride is smooth and confident. It's like having an attentive driver behind the wheel. Now as Cruise announced this morning, it is inviting members of the public to sign up for their own driverless rides through a waitlist on the Cruise website. This is the first truly driverless ride-hail service offered to the public in a dense urban environment. To maximize its learnings, Cruise will prioritize use cases that are natural fits for autonomous ridesharing. This major milestone brings Cruise even closer to offering its first paid rides and generating $50 billion in annual revenue by the end of the decade. It also means that the SoftBank Vision Fund will invest as planned another $1.35 billion in Cruise. This is another strong vote of confidence in the Cruise team, its technology, and the services it's creating. Additionally, Cruise continues to advance the strong relationship it has established with Walmart, where the team is making progress on driverless deliveries of groceries to customers every day. With this incremental investment and the investments from General Motors in companies like Honda, Microsoft, and Walmart, Cruise is very well capitalized to scale its business when the origin production comes online at Factory ZERO late this year. So Kyle, congrats. Now I want to turn to the significant investments we are making to expand both our battery cell and EV assembly capacity. We believe our strategy to scale a common LTM cell, component set, and platform will create significant long-term value for all GM stakeholders. We also recognize that we need to launch more EVs faster, so that's exactly what we are going to do. As you know, the GMC HUMMER EV is already in the market. Cadillac LYRIQ deliveries begin in less than 60 days, and additional BrightDrop EV600 production begins at CAMI late this year, where we'll launch with an annual capacity of 30,000 units and the ability to nearly double production by mid-decade. The Chevrolet Silverado EV launches next spring, and the Chevrolet Equinox and Blazer EVs will also reach the market in 2023. We have the teams working to accelerate the volume curves for all of these launches and to resume both EV and EUV production as soon as possible. And we have set a target to deliver 400,000 EVs in North America over the course of 2022 and 2023. As you know, we have also announced additional battery cell and assembly capacity investments in Michigan that will give us more than 1 million units of EV capacity in North America by the end of 2025, and this includes 600,000 full-size trucks. This is in addition to more than 1 million units of EV capacity in China over the same time frame. And I can tell you right now, 1 million units in North America won't be enough to meet the steep inflection in demand that we expect starting mid-decade for our EVs. That's why we will continue to convert ICE capacity to EVs and plan to invest in a third EV truck plant. We are formulating plans for the truck plant right now and we will share more as we work through the details. Importantly, battery cells will not be a constraint to our long-term EV growth. Our Ultium Cells JVs in Ohio and Tennessee come online in 2022 and 2023, respectively, and we will add capacity as demand grows. Our Ohio plant will launch with seven-day operations, adding 10% capacity and 200 jobs. Cell production in Michigan is scheduled to begin in late 2024. And I'm sharing today that we will announce the location of our fourth U.S. cell plant in the first half of this year. Together, these plants will support GM's EV volume growth and supply our customers in the rail, trucking, aerospace, and marine industries. Equally important for our EV strategy for North America is that it is backed by a strong, more sustainable North American-focused supply chain that includes lithium, rare earth material, permanent magnets, cathode active material, silicon carbide, motor starters, and more. To deliver this acceleration, we are pulling ahead significant investment into the 2022 to 2025 timeframe, and we will share more details as we further refine our plans. Growing customer demand for the first wave of Ultium products strongly supports these investments. We already have more than 59,000 reservations for the GMC HUMMER EV pickup and SUV. Not surprisingly, some of the first owners are very prominent figures in the sports and entertainment industries, and their initial feedback has been just incredible. They expected a super truck, and they got one. Our next electric pickup will be the Chevrolet Silverado EV. More than 110,000 Silverado EVs are reserved so far, including reservations from more than 240 fleet operators, and the numbers keep growing every day. Some of the world's largest fleet customers, including FedEx, Verizon, Merchants Fleet, and Walmart, are adopting BrightDrop vehicles and their technology. All told, we have more than 25,000 production reservations for BrightDrop cargo vans. And customer interest in the Cadillac LYRIQ is growing so quickly that we’ll forgo a new round of reservations and begin taking customer orders soon after the debut edition launches in March. One of our most highly anticipated reveals this year will be the Chevrolet Equinox EV, which we previewed in January. The Verge named it the best electric car of CES, saying there's a perception that electric vehicles are luxury items. So when General Motors said the Equinox would come with a $30,000 sticker price, it's something worth noting. The efficiencies created by the Ultium platform are a key reason why we will be able to deliver truly affordable EVs like the Equinox. Affordable EVs are part of the market that startups aren't targeting, but they are key to driving mass adoption of EVs, which is a national and a global priority. That's why we plan to follow the Equinox with an even more affordable EV. Now let's shift and talk a little bit about our other GM growth platform. Throughout the year, you will see the expansion of advanced vehicle technologies, new shopping tools, and continued progress at our new business start-ups. This spring, we will launch redesigns of the Chevrolet Silverado and the GMC Sierra 1500 pickups and offer them with Super Cruise with expanded capabilities that include lane change on demand and hands-free trailering. These are first for the segment. In the same timeframe, GM and our dealers will begin marketing CarBravo, our new used vehicle shopping service. This is truly a win-win. Our dealers will grow their business by offering customers online access to far more inventory than other services. In turn, we expect to drive incremental GM and GM Financial revenue by selling products like OnStar Insurance, OnStar Connected Services, accessories, and financial services. It will also help support strong residual values for off-lease vehicles. Then next year, we'll roll out Ultifi, a new end-to-end software platform for EVs, AVs, and ICE vehicles that will have even more sweeping over-the-air capabilities than we have today. This includes the ability to back half features to the Cadillac LYRIQ. Ultifi will be the foundation for new GM-developed and approved third-party apps, in-car subscriptions, and other connected services that enhance the customer experience and expand our revenue through the life of each vehicle. We can and we will keep up our aggressive pace backed by strong results. We expect to follow our record EBIT-adjusted earnings in 2021 with another year of record or near-record results in 2022 while investing significantly more year-over-year to accelerate our growth. Paul will share more details on our results and guidance in his remarks. But before I turn the call over to him, I would like to discuss our capital allocation strategy. The prospect of continued strong earnings and free cash flow, even as we invest for growth, naturally raises questions about resuming a common stock dividend. As we move forward, we will consider all opportunities to return excess capital to shareholders, but we will not reinstate a dividend at this time. Our clear priority is to accelerate our EV plan and drive growth, and we want to maintain maximum flexibility to invest as opportunities arise across our growth platforms, including many of the accelerated plans I've outlined today. I think we've consistently demonstrated that we're a team that delivers on our commitments. That's more important now than ever with the incredible opportunities in front of us. So now I'm going to turn the call over to Paul, who will walk us through the quarter and our outlook. Then Paul, Dan Berce, Kyle Vogt, and I will take your questions.

Thank you, Mary, and good afternoon, everyone. We sincerely appreciate you taking the time to join us. As Mary mentioned, the strong results last year, including record full-year EBIT-adjusted and EBIT-adjusted margins, are a reflection of the hard work and execution from our team and the underlying strength of our business. We're seeing strong demand for our products, especially our trucks and SUVs, and we are striving again this year to produce as many of them as we can. I want to thank the entire GM team once more for the execution during this past year. The cash that we generate today is funding the transformation of GM in pursuit of the growth strategy we shared last year in our Investor Day. We see a path to doubling revenue by 2030 while expanding margins with significant opportunities in software, services, and new businesses in electric and autonomous vehicles. Now let's get into the results. While we face the well-publicized global semiconductor challenges and continued pressure from COVID protocols throughout the world, the GM team once again delivered tremendous results in 2021 through our production prioritization and work across our value chain. For the full year, we generated $127 billion in revenue, $14.3 billion in EBIT-adjusted, 11.3% EBIT-adjusted margin, $7.07 in EPS diluted adjusted, and $2.6 billion in adjusted automotive free cash flow. In the fourth quarter, we generated $34 billion in revenue, $2.8 billion in EBIT-adjusted, 8.5% EBIT-adjusted margin, $1.35 in EPS diluted adjusted, and $6.4 billion in adjusted automotive free cash flow. Free cash flow in the quarter was largely driven by working capital rewind as we were able to complete and wholesale over 80,000 vehicles that had previously been built without certain components, as well as dividends from GM Financial. We saw improved semiconductor availability in the fourth quarter compared to the third quarter, which enabled us to increase our wholesale sequentially while substantially reducing our inventory of vehicles built without certain components, and we expect ongoing semiconductor availability improvements throughout 2022. We also realized strong price and mix performance in North America through our production prioritization actions and our go-to-market strategy. Additionally, used vehicle prices and strong credit performance continue to drive record results at GM Financial. So let's take a closer look at North America. In Q4, GM North America delivered EBIT-adjusted of $2.2 billion as we continue to see robust customer demand for our products and tight dealer inventory driving strong transaction prices. These results were somewhat better than our December updated guidance expectations as we saw continued volume and cost improvement. On a year-over-year basis, in the fourth quarter, we saw volume decreases and increased investments in growth, partially offset by pricing and mix. US dealer inventories ended the year at around 200,000 units, of which only approximately 25% is grounded stock, resulting in continued high sales turns of around 10 days. Moving to GM International. In the fourth quarter, GMI EBIT adjusted was approximately $0.3 billion, relatively flat year-over-year. China equity income was $0.2 billion in the quarter with continued strong mix, stabilization in pricing, and material cost performance offset by semiconductor and commodity impact. As we referenced last quarter, our international business outside of China has made substantial progress on our path to sustainable profitability. GMI EBIT-adjusted, excluding China equity income, achieved profitability in the fourth quarter despite continued semiconductor pressure, and the Chevrolet brand has regained its retail market share leadership in South America. A few comments on GM Financial and the Corp segment. GM Financial concluded another extremely strong year with Q4 EBIT-adjusted of $1.2 billion, with record full-year EBIT-adjusted of $5 billion. GM Financial paid an additional $1.7 billion dividend in Q4. That brings the total GM Financial dividends to $3.5 billion in 2021, equivalent to how much we paid for the company. Going forward, we expect GM Financial dividends to moderate as earnings normalize, and we continue to grow the asset base. Corp EBIT-adjusted in Q4 was down year-over-year by about $0.5 billion, driven by the non-recurrence of mark-to-market gains recognized in Q4 2020. Now, turning to our outlook for 2022. Today, we see a stabilizing semiconductor environment and envision wholesale getting to a normalized run rate towards the beginning of the third quarter with a target of around 800,000 units in North America on a quarterly basis. We expect total company volume to increase 25% to 30% year-over-year, with the majority of the increase occurring in the second half of the year, primarily due to the production constraints in the second half of 2021. Sequentially, we expect the positive trend to continue, with Q1 wholesale volumes up 20% to 25% versus Q4 2021. In 2022, we anticipate light industry sales of approximately 16 million units, dealer stock to remain tight, and the dynamic where production is the gating factor for sales volumes continuing into 2022. As you think about the mix of this incremental volume, remember that in 2021, we largely protected our high-demand truck production. As a result, the incremental volume in 2022 will be mostly weighted towards small and midsized SUVs and sedans. Now, let's turn to our expectations for growth investments in margins. We're at a very important stage in the growth and development of some of our key businesses, and we are taking the very intentional step of investing heavily into them to accelerate our expansion. Cruise expenses are expected to increase as we move towards commercialization and hire around 500 additional employees, increasing their workforce by around 20% to advance technology as well as accelerate the operational infrastructure to grow and expand. We also expect to see some wage rate pressure as we continue to attract top talent to the company. Corporate expenses are expected to increase by approximately $0.5 billion as we expand the BrightDrop business, including product development and manufacturing spend to prepare the CAMI facility for ELCV production later in the year, and expanding customer pilots for the EP1 electric car, which we expect will drive software and services recurring revenue opportunities. We're going to continue to roll out OnStar Insurance across the country. We're in 46 states today and expect to be in all 50 by the second quarter. We're going to develop new products at GM Defense and continue to incubate new ideas to drive incremental growth and value in the future. We're also expecting to invest another $1.5 billion in expenses to expand software development and further accelerate our EV portfolio, which includes close to $1 billion of incremental engineering and software-related development. These investments are building the foundation to grow and accelerate our AV, EV, and software businesses as we aggressively launch approximately 20 EV products in North America and more than 30 EV products globally through 2025 and introduce Ultifi. These investments will also drive meaningful revenue growth starting in 2023 initially from EVs, BrightDrop, and Cruise, but expanding to software and services as we launch Ultifi and grow other new business opportunities such as OnStar Insurance and GM Defense in the next few years. We're also expecting commodities and logistics cost pressure of $2.5 billion year-over-year, primarily weighted to the front half of 2022. From a non-operating perspective, we expect a combined $1 billion year-over-year headwind from the non-recurrence of mark-to-market gains we achieved in 2021 and a reduction in net pension income as we further de-risk the planned asset profile. I want to reiterate that, despite all of this, we expect to generate 10% North America EBIT-adjusted margins in 2022, inclusive of the increased expenditures related to our growth investments and highlighting our ability to fund these initiatives through internally generated cash flow. In China, we expect equity income from our joint ventures to exceed $1 billion and remain relatively flat year-over-year. We anticipate a modest increase in volume, which will be offset by a more normalized mix, competitive pricing environment, and increased investments as we prepare to bring more EV products to market. We expect GM Financial performance to be in the $3.5 billion to $4 billion range as we do not expect a repeat of some of the 2021 allowance releases, and we anticipate that credit performance in used vehicle prices will begin to moderate. Assuming continued steady demand for new vehicles, no significant new economic or supply chain challenges in 2022, we expect EBIT adjusted in the $13 billion to $15 billion range, EPS diluted adjusted in the $6.25 to $7.25 range, and adjusted automotive free cash flow in the $7 billion to $9 billion range. Adjusted automotive free cash flow will be driven by strong earnings and working capital rewind as volumes increased. We expect capital spend to be in the $9 billion to $10 billion range in 2022, including investments in our Ultium battery cell JVs, and expect similar levels of spending over the next several years. In summary, we had a strong finish to the year, and our results are a reflection of the team's focus and execution in the face of the continued challenging environment. In 2022, we expect strong commercial performance, and we are aggressively reinvesting some of our short-term EBIT improvement to accelerate our EV, AV journey, while still driving similar results to our record performance in 2021. This demonstrates the strength of our underlying business, the strength of our truck and SUV franchises, our industry-leading customer loyalty, and world-class manufacturing and design capabilities. We will continue to leverage these competitive advantages as we vastly expand our battery cell and EV assembly capacity in North America to lead the industry. This concludes our opening comments, and we'll now move to the Q&A portion of the call.

[Operator Instructions] Our first question comes from the line of Rod Lache with Wolfe Research. Your line is open.

Hi, everybody. Congratulations on these results and the outlook. I'll ask two questions. First, just a financial one for Mary and Paul, you guys have almost $22 billion of cash. Your U.S. pension is now about fully funded. You've got $40 billion of liquidity, and you've shown a lot of resiliency in different financial conditions and operating conditions and are talking about $7 billion to $9 billion of free cash next year. So that's going to lead to some speculation on where these investments could be that you're contemplating instead of cash returns. So can you maybe talk about, are there investments that you're thinking about that are large enough that would consume cash of that magnitude?

So Rod – hi, thanks for the question. And as we look at it, we're going to follow the capital allocation framework that we're going to continue to invest in opportunities that allow us to generate returns -- return on invested capital of greater than 20%, maintain an investment-grade balance sheet, and then return the balance to shareholders. We talked about a lot of pull ahead and acceleration to our EV strategy. And as we work through that, we will follow our capital allocation framework. So think in February, it's a little early to look at that, but we'll provide more guidance through the year on that.

Okay. And I was hoping to ask a question to Kyle. So you're currently -- congratulations, by the way, on the milestones that you've achieved. And these operations look pretty impressive. Can you talk a little bit about what the operations look like in prime time? So during the day, in more congested periods. And 2021 seems like it's kind of a step between R&D and commercialization. Can you maybe give us a little bit more of a sense of what commercial scale will look like and what kind of pace of expansion we should be thinking about? At one point, you were talking about, I think, a new city every six months, something along those lines. But any update on that?

Hi Rod, thanks for the question. Yes, it has been a very eventful day for us and a really good 2021 as we enter early commercialization. Our approach to bringing driverless cars to dense urban environments has been a cautious and careful one. We're starting with limited hours of the day, limited geofence. And what we're looking to do is confirm that the performance and functionality of our system matches expectations and also that we give the communities where we're operating a little bit of time to acclimate, especially San Francisco, which is the first urban environment that's ever experienced this. So we're going slowly and cautiously. But as we see things click and evidence that performance is meeting expectations, the focus becomes exactly what you mentioned, which is how quickly can we expand this to cover a larger service area, more hours, to serve more customers in San Francisco, but then cities beyond that. And so, we've been developing the foundational technologies to do those expansions in the background, and we've learned a lot from our operations in other cities like Arizona and Michigan. So we have a pretty good idea of what's around the corner, but we're gated by safety, and we're just in the very early days. So it's hard to know our exact rate of expansion.

Thank you.

Our next question comes from the line of John Murphy from Bank of America. Your line is open.

Good afternoon, everybody. Just a first question, it's just on the core business. When we think about the 25% to 30% increase in wholesale, I imagine that mimics production. I'm just curious, as you think about that in the context of a 16 million unit SAAR, it seems like there will be some inventory build, but not a lot. So if you wind that together with CarBravo, it does seem like you're pushing to keep ATPs high -- mix relatively high and maybe transition some of your entry-level buyers or entry-level product into the used car market, which supports residual values more structurally going forward. It just seems like you're getting a very good circular reference, keeping a lid on inventory, and then winding it up with CarBravo. I mean, what is the real opportunity here on CarBravo? And then ultimately, what could it mean for sort of this inventory management on the new vehicle side? Just seems like it's a very intertwined, very positive story?

Hey John, good afternoon. Thanks for the question. What I would say that for 2022, it's largely more of a function of what we continue to believe is large pent-up demand for new vehicles that hasn't been met in 2021 because of some of the production challenges. Certainly, what we saw as we were able to complete those vehicles, there was a little bit more going through the system of production. And as we talked about in the prepared remarks, those vehicles continue to sell very, very rapidly. So, despite the production increases we saw in Q4, we're still not really building inventory that much. And I think that's going to probably continue throughout the year with largely showing up in transit rather than on lots. That's really on the consumer, and I think that's the short-term. When you think about CarBravo, I would think about it in terms of the volume and the access to inventory that we have through GM Financial and the dealer network. It really is unprecedented level that gives customers much, much better choice and variety across the country. And we can do this in a coordinated fashion largely because of where we are with vehicles coming off lease, the GM Financial inventory across the board. So, we actually see this as a really, really strong opportunity in and of itself to expand the customer relationship and the entire sort of universe of the customer that we're working through, and we talked about at Investor Day.

Okay. And then just to follow-up on that. I mean it seems that you're tightening up and growing the core to drive more profits to fund the future, this Cruise news today -- and I'll sort of add my congratulations, too, on that to everybody on the team. As you grow in San Francisco and then repopulate the strategy in other markets, I mean, how do we think about the fleet and the capital required there to kind of follow-up on Rod's question? I mean, could there be a huge call on capital that could actually have very good returns? And what is the earnings potential in that $50 billion? I got to mention the margin is much higher than the core business at 10%. So I mean how should we think about those earnings in 2030? So, capital requirement, will you own the fleet and where the earnings go?

Yes. Keep in mind, John, that we announced last year that GM Financial has committed to a $5 billion line of credit to help finance the Origin. So, I think when we look at capital for expansion as well as for the continued development, we're not seeing any constraints in that at all. Cruise is very well capitalized. They're very well prepared for the expansion phase as they continue to roll this out and achieve their milestones.

I'm sorry. And the profitability potential on this? I mean it just seems like 10%, $5 billion is just an opening bid. It's probably a tremendous amount higher than that. I mean what do you roughly think in run rate of that profitability?

John, I think as we look, we see there's a huge first-mover opportunity to go and provide an exceptional customer experience. And so we're going to -- we do think there's tremendous margin potential in this business, but we also think growth is really important. So, you'll see us balance that in the early days to really get a foothold -- a solid foothold in a leadership position. So, down the road, we see tremendous profit, but we're going to really -- we're going to scale fast.

Our next question comes from the line of Joe Spak with RBC Capital Markets. Your line is open.

Thanks. Good afternoon. Appreciate the update on the Lordstown and Springhill Ultium cells build-out and when those are starting. I was wondering if you could provide a little bit more color in terms of either from a run rate basis or maybe just an absolute basis where you think each of those -- or how long it's going to take those facilities to get up to their stated capacity. And then maybe just a quick aside, like if – it sounds opening mid-2022, where are you actually getting Ultium cells for the HUMMER, the BrightDrop and the LYRIQ?

Today, we're getting those from LG. But as we look, we're going to ramp up those plants as quickly as we can with one coming online in 2022, one in 2023, and then one late 2024 and one yet to be announced. So we're going to accelerate those as fast as we can. As I said in my prepared remarks, we've already found ways to add capacity from an operating perspective and efficiencies in the plant. So we're just going to keep going full out because we see the opportunity for substantial EV volume growth in this period of time.

Okay. And then I guess following up on that, and I know you've mentioned in your remarks, Mary, you're not don't really think you're constrained by your cell supply here. But it does seem like you have at least over the next year or so maybe an allocation decision of what programs those cells go to. So for instance, in 2023, you have both the Silverado and Equinox. So how do you go about deciding that, whether it sort of goes towards potentially a more profitable vehicle or a segment where you see less competition and more potential white space?

Well, I think we’re working to expand our capability to accelerate all of those models. As I said, we're just seeing such strong demand, and that's caused the team to really go back and look and say, okay, let's double down and go faster from an acceleration perspective. Clearly, the cells will be something that we'll look to grow as well. One of the reasons why we're announcing the battery plant that we already did in Michigan, and we'll shortly be announcing the fourth battery plant, as well as continuing to work with LG. So we're focused right now not on trade-offs, but on enabling as many as we can during this period of time. And you heard me say that between 2022 and 2023, we want to – our plan is to have over 400,000 EVs into market in North America. And we're just going to keep working to improve that. And I have a lot of confidence in the GM team that when you give them a clear challenge, they rise to the occasion.

Thanks.

Our next question comes from the line of Adam Jonas with Morgan Stanley. Your line is open.

Thanks, everybody. I had a question about the EV models and implied volume per SKU. I guess, I ask it like this, if you were starting an EV company from scratch, would you launch 30 different models over a three or four-year period? I understand, why – I guess, I understand why GM with the brands in different regions and things attempted to do it. But if you had the alternative – if you consider the alternative higher volume, maybe hundreds and hundreds of thousands of units per model, but a small number of models?

So Adam, we're going to go for both. And from a General Motors perspective, I think when you look at how we've approached the technology and the investments we've made in Ultium and how we're looking at the portfolio, a full portfolio, because again, if you look at – and by the way, we think several of those models are going to be over 100,000 units or more than that as we do that. So I really would say, Adam, we're going for both. And it's one thing when you're looking at the market when it's 2%, 3%, 5%. We're looking by 2030 to be in the 40% to 50% adoption and to do that, you've got to meet the customer where they're at. And that's why you look at the Equinox and how significant that can be, the more affordable EV that we're going to be doing that really gets into another very important part of the market. So you have to have the proper market coverage. Otherwise, the customer is going to have to make trade-offs. And because of GM's capability -- at General Motors at any one point in time, we have almost 100 programs in flight, meaning in concept to being launched. That's the capability the GM team has. So we're moving with the speed of a startup with, I think, industry-leading technology in a platform, but we're also then leveraging the capability that GM has to attract and gain share and grow because of the vehicles that we'll have that meet their needs.

Thanks Mary. Just as a follow-up, how certain are you that the quality problems that you had with your battery partner have been resolved? Obviously, you're implying there's some improvement. But could you tell us are all the issues behind you, or are there still some issues that you're working through in real time? Thanks.

Sure. So Adam, we're already putting new battery packs into existing Bolt EVs and EUVs. We wouldn't be doing that if we didn't have confidence. The LG technical team and the GM team have worked together, we believe, as we said before, that it was very rare manufacturing defects that caused the issue. And if you look at the low number of issues we had yet the extraordinary action that we took with recalling the entire population, that's our commitment to safety. And so we have found the issues. We've put a lot more robust processes into the manufacturing process and changed the way the processing is to make sure we don't have that issue. I'd also note that, that was rich learnings that we had from our LG partners that have been incorporated into Ultium. So again, the experience that we've had of selling Bolt EVs for a while and Bolt EUVs, all of that learning has translated and gives me great confidence in the quality of the Ultium platform and the packs that we're putting into the Bolt EVs and EUVs right now.

Thanks Mary.

Thanks Adam.

Our next question comes from the line of Itay Michaeli with Citi. Your line is open.

Great, thank you. Good afternoon, everybody. Just 2 questions. Maybe first going back to AUV from Mary and Kyle. And Mary, I think in the past, you referred to the opportunity in personal consumer AV as upside potential to your 2030 target. I was hoping you could update us on the vision you have for consumers AV at GM as well as Cruise's role within that in the long run?

Well, for right now, with the significant announcement that Cruise made today, we want the team like 99.9% focused on making sure that we see the significant opportunity in rideshare and rideshare delivery. And we said most recently at the end of last year that we see -- and at CES that we see the opportunity for potentially as early as mid-decade to have personal autonomous vehicles, which is really an additive thing for Cruise because it puts more nodes on the network. It opens up another market. So we're very focused on rideshare and rideshare delivery. So this is something that we see potentially in mid-decade that we can make both businesses grow, so a huge opportunity. I don't know, Kyle, if you want to add anything?

Yes. Thanks, Mary. It's a natural fit like retail AV with increased total volumes of sensors and compute systems we're building. It's more vehicles that are on our common platforms that power these fleets of driverless cars. So it drives down the cost on a unit basis and really reinforces and bolsters the core robotaxi business. So, we see it as really a win-win situation where it improves the economics of the robo taxi business but also enables a new market and the expansion of the positive impact from this technology.

That's very, very helpful. Maybe a quick follow-up maybe for Paul. Hoping you could dimension the from the refreshed full-size pickup trucks, I think, are coming in the spring, both in terms of maybe pricing opportunities with the new content as well as any opportunities with the upgraded electrical architecture.

Thanks, Itay. What I would say is that what we see right now and what we continue to see is a really, really strong consumer preference, especially as they're buying up on features and amenities. We see that across the board in the Denali brands, high-country brands, etc., that I think it's going to continue to pay big dividends for us as we roll out the new vehicles going forward. So, without getting into specifics on vehicle margins and profitability, we're very excited about what that's going to bring and we think that the consumer is going to be really, really positive around them.

Great. That’s all very helpful. Thank you.

Our next question comes from the line of Emmanuel Rosner with Deutsche Bank. Your line is open.

Thank you very much. Two questions, please. The first one, could you please describe the current supply chain environment? Any constraints still left on the chip availability? And in particular, I'd be interested to hear what gives you confidence that you would have sufficient chip availability to produce 25% to 30% more vehicles in 2022 versus 2021. Admittedly, you were hit maybe a bit harder than other players, but obviously, this is a nice size bounce back?

Yes. Emmanuel, thanks for the question. What we're sharing is what we see with the work that we've done with all of the semiconductor manufacturers and our plans for this year. So, of course, and Paul said, if there's significant COVID disruptions or other natural disasters, that could have an impact. But we're pretty -- we're seeing definitely seeing improvement in the first quarter over the fourth quarter. We saw fourth quarter better than the third quarter. And we really see with the plans we have in place now, by the time we get to the third and fourth quarter, we're going to be really starting to see the semiconductor constraints diminish. So, that's what we're working to achieve across all of our platforms and across the globe, frankly, with all of our suppliers, but that's our best current outlook that we're sharing.

Great. Just a quick aside on this and then I have a second question on the Cruise. But just a clarification, the 25% to 30%, you're confident you could do this in North America since I think for China, I think Paul said that you were looking probably at more stable volume year-over-year?

Hey, Emmanuel, 25% to 30% is a global production number. So there's some in the US, and there's some in GM international as well.

Understood. And then second question would be on Cruise. Mary, what are your current thoughts on optimal timing to bring this to capital markets, not just because of growing capital needs with the commercialization, which seems like you have that already well in place, but also as a way to potentially unlock some additional value for shareholders?

Yes. Emmanuel, I have always said and the belief that's held by, I'd say, the Cruise Board and the GM Board that we're going to do what's in the best interest of shareholders to create long-term value. And we do see that a capital raise event is something that we need in the near term. We're – Cruise is well capitalized and has strong financial support from its investors. GM is well funded. And so we don't really think we need to raise additional funds at this time. We also are committed to making sure we have competitive compensation packages at Cruise to attract and retain the best and the brightest talent to achieve the objectives and our growth initiatives here. So my answer would be we're always going to look and do what's in the best interest. But as we look now, we're in the first chapter, and there's still so much that can be accomplished with a frictionless environment between Cruise and GM. And that's what we're really focused on, getting the technology out safely and then really growing at a pace where we can have leadership.

Understood. Thank you.

Our next question comes from the line of Dan Levy with Credit Suisse. Your line is open.

Hi. Good evening. Thank you for taking the questions. Maybe first, just a question for you, Paul, on the parameters of the guidance, EBIT guidance. I know you haven't articulated guidance by segment. There are some details there. But just given the comments for wholesale is up 25% to 30%, and you're reaffirming the 10% GM North America margin guide, even after factoring in the GMF decline and the higher spend for software and Cruise, I guess, I'm wondering how you reconcile to having that lower half of the guidance, or is that just conservatism for the unknown unknowns?

Yeah. Hi, Dan, thanks for the question. What I would say is this is very much a midpoint convention guide as we're thinking this. Obviously, we've expanded the range over prior years, which I think is a reflection of the volatility that we've seen in the place. I would be careful about extrapolating too much across the profitability from the incremental vehicles as we talked about and very intentional in the prepared remarks, a lot of that incremental volume is coming in at a lower contribution than what we've seen from the full-size trucks and SUVs going forward. That's just where the capacity is for us going forward. So what I would say is, with a really robust consumer and a strong continued environment, we would probably trend towards the high end of that. But we have a lot of volatility. So to the extent that we see consumer weakness, we see more supply chain pressure, we see more disruption in the global logistics platform that impacts production, then we could be at the lower end of the number. But we wanted to give a range that was focused around the midpoint of our expectation as well as gave some comfort and some deference to the volatility that we see.

Okay. Thank you. That's helpful. And then Mary, maybe just a question on Ultium. I'd like to revisit the platform and the benefits. So if we go to EV Silverado, and I know you haven't unveiled the full set of specs, but one question, which has come up in the investor community is that on some of the metrics relative to the other competition that's out there, it's not showing the type of advantage of your competitors that maybe some had anticipated. So maybe we can just zoom out. And I think as you're launching the Ultium vehicles, what are the benefits that we're going to see versus your competitors? Is it just these going to be more profitable vehicles? Is it that, it's going to show up in other areas of battery efficiency? Is it that this can help unlock more range that others can't have? So what are the benefits of Ultium that we're going to start to see within the vehicle on a more of a, call it, metric basis?

Yes. Well, so I mean I think when we look at what Ultium is providing, first of all, it's going to give us scale. And we do think as we get the full portfolio of Ultium launch, we're going to see that scale, and it's going to give us an advantage from an overall margin perspective. But specifically for the Silverado EV, leveraging Ultium, we have longer range, 400-plus miles, faster charging, better towing capability. And I think you have to really look at this as opposed to -- I know there's been some focus on the miles per kilowatt hour, and we haven't put all the specs out and it's going to get a very -- with a lot of features that you choose, I mean, we very carefully look to say, what are we going to provide for the customer? What does the customer want in this segment? What's important to them? And when you look at more range, faster charging, more -- this is more capability in the real world, then when you look at the Ultium platform, also, it gives us the opportunity to have a mid-gate, which gives much more flexibility, also being able to drive these trucks that people are going to see the benefit of a fully integrated battery pack and body structure, which gives us a mass advantage as well as, we think, superior vehicle dynamics. So -- and then from an Ultium perspective, the other thing I would say as it relates to the truck portfolio, it's going to give us an opportunity to have a full truck portfolio faster. And as we've seen over the last couple of years, think about when we rolled out this current generation of trucks, we went high feature and high value. And we've grown our truck share capability. So, we know that truck customer, there's some that want high value, some that want high feature. Ultium is going to give us the opportunity to again delight the customer with what they're specifically looking for as opposed to 1 or 2 point solutions off of a retrofitted platform.

Great. Thank you very much.

Our next question comes from the line of Colin Langan with Wells Fargo. Your line is now open.

Great. Thanks for taking my questions. I just wanted -- sorry, I hope it's not too I just want to clarify on the Cruise announcement, people are able to sign up on the wait list. Does that mean you're actually going to be able to do it soon, or is it like today, or is that like you're on a waitlist? And then in a couple of months, they're able to actually start taking rides? Any -- I just want to clarify that it's kind of felt like it might have been today. And then I assume that means you have that sort of final license I think you talked about that you needed in San Francisco to deploy?

Hi Colin, thanks for the question. So the waitlist is open. And based on the early demand we saw this morning, there's going to be a pretty long list pretty quickly. And we are starting small with a limited number of vehicles and limited hours. And so I don't think we're going to be able to get to everyone on that list in the next week or 2. And so it could be some time before people on the waitlist get to use the product. But we have already started carrying members of the public and we're working through that waitlist now, adding new people every day. The other part of your question, I'm sorry?

I think that answers it. I assume then you got that last license, I think you had mentioned.

Yes. On the permit, we still have 5 out of the 6 necessary permits to operate a fare rideshare service. So as of today, all of the rides are free. And we filed the last application for the last remaining permit in November last year, and we continue to work with the CPUC, California Public Utilities Commission, and answer questions they have about that application as they pop up. So stay tuned for more news on that.

Okay, that is helpful. Thank you. And then just I wanted to follow up on the 25 to 30 -- again, sorry. Other automakers are announcing cuts, so it's a bit surprising. I mean what kind of line of sight do you have? I mean, is it just you have maybe bigger buffer stock now, that you're maybe more able to swap out some of these chips? So just feels a little risky considering it seems to have been surprised over the last year that the supply wasn't there. And it seems like a very fragile semi pipeline, it seems. Any sort of visibility there that you could provide?

Well, again, as I said, we have been working closely with our supply base with the Tier 1s as well as the semiconductors. We said last year that we were going to work deep into the tiered base and understand the capabilities. We were hit pretty hard last year third quarter with Malaysia because it just so happened that the facilities that have a lot of GM business happened to be hard hit by COVID, and you saw the losses we suffered there. So, I think that's a bit of it. But this is our best estimate with the detailed work that we've been doing all last year and this year. Now, we still get surprises and then we work to solve those issues either with an engineering solution or making trade-offs between vehicles. We believe we're going to continue to do that. But what we're sharing with you is based on everything we know today, based on the commitments of the supply base, and barring some major COVID disruption or some major natural disasters, this is what we think we're going to be able to do.

And Colin, if I can just add to that. I think understand some of the skepticism, especially based on the volatility and where others are going forward. But this is why we wanted to add the point in there about where we see Q1. We're coming off of a lower baseline in the second half of the year, largely because of the impact that Mary mentioned. But the run rate that we've seen sequentially from 3Q to 4Q to 1Q is giving us a heightened level of confidence. It doesn't mean that things won't pop up. But certainly, what we're seeing in the very, very near term is giving us a little bit more confidence. And I think the general consensus is that things will be more stable in the second half of the year than in the first half of the year. So that's kind of how we're extrapolating our expectations.

Okay. Thanks.

Our next question comes from the line of Ryan Brinkman with JPMorgan. Your line is open.

Hi, thanks for all the color on 2022 outlook including relative to both volume and pricing. I'm curious for your thoughts on mix in 2022. So, for example, as chip supply continues to hopefully normalize, does that mean you may produce more modestly priced or lower trim model vehicles, including for rental customers, etc.? What's the right way to think about how much of the much richer mix has been supply-driven with automakers, including yourselves opting to produce only higher-end vehicles, and so it could maybe unwind versus how much of the much richer mix is maybe more sustainable demand-driven, for example, with consumers increasingly demanding these high-end features? What do you think?

Well, thanks for the question, Ryan. I think we continue to just see and have talked all through 2021 about the strength of the consumer and the strength of the new models, especially in the full-size trucks and SUVs and how customers were buying up for them. So, there's nothing that's changed underlying in the consumer from that standpoint. The comment that we made in the prepared remarks was largely a function of the increased volume because we were running full out on a lot of the full-size trucks and SUVs. There really a lot of the unmet production or underutilized production that was hit in 2021 was in the crossover smaller SUVs and sedans. So by definition, that's where a lot of the production increases and volume increases are going to be in 2022. I don't think that that changes mix. We're going to see – continue to watch that with the consumer going through 2022, and it's something that we can adjust on the fly as we see that going forward. But no reason to believe that the strength of the consumer is deteriorating from what we saw in 2021.

And the only thing I'd add, Paul, is that when you look at the new full-size trucks, with the enhancements that we've made, and frankly, even offering some further up-level models, I think that's just another huge opportunity for us. So I think this is going to be a positive year for that. And again, we focus on those vehicles that we have no – we're already running full out. So we have no capacity to make up, which kind of puts a little more color onto what Paul said about where the opportunity to add this year is.

Very helpful. Thank you, both. And just lastly, maybe a related follow-up question on if there might now be a new normal that you see in terms of US industry sales. We used to say that normalized US demand was around 17 million. And sales did average around $17 million for a long time, but that was also when vehicles cost $30,000 or $35,000 versus now they're more like $40,000 or $45,000. So just curious if you have any updated thoughts on any new normal in terms of sales and pricing, etc.

I don't know if there’s anything normal right now when you look at all of the challenges that the industry is still facing. As Paul said, we think we've got a large pent-up demand especially for GM vehicles and strong full-size trucks coming out. We continue to see just incredibly strong demand for our full-size SUVs and midsize crossovers. So I think it's too early to declare normal when we're still impacted by the semiconductor shortage. They're still buying behavior as an outcome of COVID and some of the support that was provided. So I think it's going to take a little while before we declare normal.

For our last question comes from the line of Brian Johnson with Barclays. Your line is open.

Yes. Hi, team. It's Stephen Hunt on for Brian. Just two questions here from us. In terms of the kind of consolidating the semiconductor purchasing the three families and the co-development, I guess, where do we stand on that? And then what's the kind of most expected timeframe when that could add to incremental chip supply?

Yeah. That's a midterm type of solution. Clearly, it's full speed ahead of working with the partners that we announced and getting to the families. And so reducing complexity, which we think will allow us to secure supply in addition to the relationships that we're creating with these strategic partners. But that's a midterm solution, not a short-term solution.

Okay. And then I guess a somewhat related question. In terms of the long-term margin target laid out at the Capital Markets Day, 12% to 14% margins. It looks like as we go into 2022 overall, there's a decent amount of step-up in investment for some of these related businesses. I guess the move out to 2030, should we be expecting kind of a directional linear move towards that 12% to 14%, or should we be expecting some years to be kind of flattish or even potentially down as we shift out of facing the buzz and bring on new businesses?

Hey, Stephen, it's Paul. So what I would say is it's a little bit lumpy between now and then because if you think about the trajectory, the number one priority and foundation that we're building is getting the EV fleet out there. So you're going to see a lot of the revenue growth really driven by EVs over the next few years. And as you get into the latter half of the decade, and you've got the Ultifi platform out there and growing that foundation through electric vehicles, you're going to start to see what we think is going to be a pretty quick ramp-up in the software. So the revenue growth is going to be a little bit more steady, especially as we look at what Cruise is doing going forward. The margin performance is probably -- lags a little bit because some of the higher margin revenue opportunities from software and the connected vehicles are going to be -- are going to come after we get that foundation built in the latter part of the decade.

Okay. Understood. Thanks for taking the question.

Thank you. I'd now like to turn the call over to Mary Barra for her closing comments.

Thanks, Jordan, and thanks, everybody, for your questions. I want to close again by thanking the GM team broadly, including the GMF team, our union partners, our dealers, and our suppliers. The work that they did together, seizing opportunities, addressing challenges is what allowed us to have this record performance. And we take that collaboration and problem-solving agility and resiliency into 2022, and we apply that to continuing to accelerate our EV transformation, the work in software and, of course, supporting our Cruise company as well. So I couldn't be more excited about 2022 and what the year and how it can unfold. I hope you see and you see the clear sense of determination that we have, and we will move even faster to deliver on our commitments and achieve the growth that we know is right in front of us. So, I want to assure you that we'll keep you updated every step of the way, but '22 is going to be an exciting year. Thank you.

That concludes the conference call for today. Thank you for joining.