Q1 2025 General Motors Co Earnings Call
Good morning and welcome to the General Motors Company First Quarter 2025 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 in an answer session.
We are asking analysts to limit their questions to one and a brief follow-up.
To ask a question, please press star and they want on your telephone keypad to join the queue.
To withdraw your question, press star and then two.
As a reminder, this conference call is being recorded Thursday, May 1, 2025 .
Speaker Change: I would now like to turn the conference over to Ashish Kohli, GM's Vice President of Investor Relations.
Thanks Julie, and good morning everyone.
Speaker Change: We appreciate you joining us as we review GM's financial results for the first quarter of 2025.
Speaker Change: Our conference call materials were issued this morning and are available on GM's Investory Relations website.
We are also broadcasting this called Beer Webcast.
Speaker Change: Joining us today are Mary Barra, GM's Chair, and CEO , and Paul Jacobson, GM's Executive Vice President, and CFO .
Speaker Change: Susan Schafffield, President and CEO of GM Financial, who has taken over from Dan Berce after his recent retirement, will also be joining us for the Q&A portion of the call.
Speaker Change: On today's call, management will make forward-looking statements about our expectations . . .
Speaker Change: The statements are subject to risks and uncertainties that could cause our actual results to differ materially.
Speaker Change: These risks and uncertainties include the factors identified in our filings with the SEC.
Speaker Change: Please review the Safe Harbor Statement on the first page of our presentation, as the content of our call will be governed by this language.
Mary Barra: And with that, it's my pleasure to turn the call over to Mary.
Well, thanks, Ashish, and good morning, everyone.
Mary Barra: I want to thank you for joining today's call which was, as you all know, originally scheduled for Tuesday [inaudible]
Mary Barra: We've had continual discussions with the President and his team since before the inauguration and had a good understanding of the President's plans heading into this week. But we felt it was important to hold this call after official actions were taken so we could have a more productive discussion with all of you.
Mary Barra: We're grateful to President Trump for his support of the U.S. auto industry.
Mary Barra: The administration invested the time to understand what it takes to be successful in this capital intensive and highly competitive global industry, how we can work together to strengthen and grow American manufacturing, and the importance of companies like GM to communities across the country.
Mary Barra: Almost 1 million people in the U.S. depend on GM for their livelihood, including our employees, suppliers and dealers.
Mary Barra: We have a network of 50 U.S. manufacturing plants and plant and park facilities in 19 states, which includes 11 vehicle assembly plants. And we've invested $60 billion here over the last five years.
Mary Barra: Our business is growing and we'll continue to grow our investment in this country as we move forward.
Mary Barra: With the policy clarity we now have, we are updating our full year EBIT adjusted guidance to a range of 10 to 12.5 billion including a current chair of exposure of 4 to 5 billion. Paul will address this more from a from a detailed perspective in a few minutes. We are updating our full year EBIT. We are updating our full year EBIT. We are updating our full year EBIT.
Mary Barra: We look forward to maintaining our strong dialogue with the administration on trade and other policies as they continue to evolve. As you know there are ongoing discussions with key trade partners that may also have an impact. We will continue to be nimble and disciplined and keep you updated as we know more.
Mary Barra: Over the last several years, we have been preparing for shifts in global trade policy by strengthening our U.S. manufacturing capability and supply chains.
Mary Barra: Since 2019, we have increased our direct purchases in the U.S. for North American production by 27% and the content in our U.S. assembled vehicles is more than 80% U.S. M.C.A. compliant.
Mary Barra: In addition, we have reduced our direct material spend in China for US production to less than 3% and we have grown to become the largest battery cell manufacturer in the US through our joint venture plants in Ohio and Tennessee.
Mary Barra: As terrorist policy came into focus, we increased full-size pickup production at our Fort Wayne truck plant, which was already running three shifts by approximately 50,000 units on an annualized basis. And we are developing plans to further increase US vehicle production.
Mary Barra: GM teams are also working directly with our suppliers to further increase their US content and drive even higher levels of USMCA compliance.
Mary Barra: and we are increasing production of US-assembled battery modules, a low cost way to increase US content.
Mary Barra: Alongside these actions, we are scrutinizing our discretionary spending everywhere and we are taking steps to ensure that we stay aligned with a strong consumer, with a strong consumer demand for our ICE vehicles and the evolving regulatory environment around vehicle admissions.
Mary Barra: Some of these steps include extending production of the Cadillac XT5 at the Spring Hill Assembly Plan in Tennessee through the end of 2026.
We're also focused on growing our EV business responsibly.
Mary Barra: We have some of the best and most successful EVs on the market today, including the Chevrolet Equinox EV and the Cadillac Lerid.
Mary Barra: To protect our brands, we have moderated EV production to ensure that we stay aligned with the consumer demand to avoid the heavy discounts our competitors offer.
Mary Barra: This will reduce our scale-driven profitability improvement, but we need to follow the consumer.
Mary Barra: We're also focusing our EV investments on greater efficiency and cost reduction across the value chain instead of further portfolio expansion.
Mary Barra: We've announced in a group to sell our share of the Ultim South Plan in Lansing to LG Energy Solution, which will result in us recouping our capital investment.
Mary Barra: In addition, we'll continue to execute our plan to develop US sources for battery style and electric motor inputs like lithium, rare earth metals, permanent magnets, and cathode active material.
Mary Barra: Many of our supply chain initiatives are coming online later this year or early next year. In 2027, we expect our joint venture with Lithium Americas to open phase one of the Thacker Paths project in Nevada, and we are contracted for 100% of that off-tap.
Mary Barra: James Business is fundamentally strong as we adapt to the new trade policy environment.
Mary Barra: Great execution is driving sales and market share growth with consistently lower incentives, lower inventory and solid margins and I'm very proud of our employees, our dealers and our suppliers for their hard work.
Mary Barra: In Q1, we gained almost two full points of market share year-over-year in the US, which outpaced every other major automaker.
Mary Barra: In addition, our first quarter share of the US EV market was 10% and rose to 12% in March, solidifying our position as the number two EV seller.
Mary Barra: and our Q1 margin in North America was 8.8% well within our 8-10% range target range despite the addition of cruise expenses.
Our momentum is broad-based. [inaudible]
Mary Barra: Chevrolet became the fastest-growing EV brand, Cadillac gained ice in EV market share, both year-over-year and sequentially from Q4.
Mary Barra: and our redesigned Iceshi Vs including the Chevrolet Equinox, Traverse and Tahoe are hits because customers love their design, performance and value.
Mary Barra: Importantly, they are more profitable in the prior generation thanks to our focus on capital efficiency, complexity reduction and manufacturing efficiencies.
Mary Barra: In addition, sales of our redesigned Chevrolet Suburban and GMC Yukon were up more than 30% and the Cadillac Escalade had its best ever first quarter thanks to a combination of new gas powered bottle and the all electric IQ.
Mary Barra: In their review of the Escalade IQ Motor Transit, it may be the best luxury machine Cadillac has ever built, which speaks volumes about design, performance, technology and everything we're delivering in that vehicle. [inaudible]
Mary Barra: The sex sex of these products also supports the 2025 supercruise growth targets that we outlined in January , which include doubling the number of supercruise equipped vehicles on the road.
Mary Barra: and we're off to a good start. In the first quarter, we expanded our super-crews equipped fleet by more than 100% year-over-year or about 230,000 units.
Mary Barra: Tara's had a relatively small impact in Q1 and there were other headwinds and one-time factors that impacted the result, which we will discuss. They included some cost pressures and lower full size pickup whole cells because of planned downtime for planned upgrades.
Mary Barra: Behind the scenes, our supply chain team worked with speed and agility during the quarter to overcome the effects of a fire at a supplier factory that could have severely impacted production of full-size pickups and SUVs.
Mary Barra: As things played out, we were able to quickly move some of the production and recover and repair tools from the damaged site, limiting the impact to about 7000 units in the quarter. All of these units are expected to be recovered in the second quarter. [inaudible]
Mary Barra: The team in China also deserves recognition for delivering positive equity income while restructuring in the process.
Mary Barra: They're launching very competitive new products and growing sales volume and market share.
Mary Barra: For example, all new beaux launched in China will be launching in China starting in the second half of this year and they will be new energy vehicles and the premium models will be marketed under the electrosub brand.
Mary Barra: Bill will also leave the development of a sophisticated ADES smart cockpit and chassis designs across our Chinese vehicle portfolio.
Mary Barra: As I said, we started the year strong after growing revenues 9% and delivering record results in 2024 because the fundamentals of our business remain strong.
Mary Barra: We managed everything under our control and we continue to thoughtfully plan for the future. This includes developing our next generation software to find vehicle platform, which will be simpler but have even more capability.
Mary Barra: It includes adding new features and products developed by our software and services team.
Mary Barra: We will also continue to grow and enhance the capabilities of super crews, the industry's best L2 driver assistance technology.
Mary Barra: We will also develop L3 and even more advanced automated autonomous technologies in collaboration with the team from Cruise.
Mary Barra: Leveraging the economies of scale we have made have made us the OEM producer of lithium-ion cells in the U.S. And we're introducing new battery chemistries and form factors that will deliver the EV range and performance our customers have come to expect from GM with even lower pack cost improved profitability.
Mary Barra: Finally, we are continuing to deploy AI solutions across the business. This includes exciting collaboration with NVIDIA, next-generation vehicles, factories, robots using AI simulation and accelerated computing.
Mary Barra: You'll hear more about these profit driven value creating initiatives throughout the year.
Speaker Change: So now I'd like to turn the call over to Paul. [inaudible]
Paul Jacobson: Thank you, Mary. I appreciate you all joining us this morning. Our robust vehicle portfolio combined with our continued discipline market strategy has once again delivered solid financial results.
Q1 U.S. sales growth outpaced every other major automaker.
Paul Jacobson: US deliveries were up 17% year over year and our market share grew to 17.2% marking a nearly two-point improvement from the prior year all while maintaining incentives around 300 basis points below the industry average.
Paul Jacobson: We enter the quarter with ICUS dealer inventory of 49 days down from 53 days at the end of Q4. Inventory is turning quickly and nearly 90% of the inventory at quarter end was comprised of model year 2025.
Paul Jacobson: As we all know, we're witnessing a significant shift in policy into the new administration and we are encouraged by the president's recent actions to strengthen the auto industry.
Mary Barra: As Mary outlined, we have already implemented several no-regret strategies to mitigate some of the impact with additional measures being evaluated. Adapting to this dynamic environment will take some time, but we remain confident in our ability to respond effectively and offset at least 30% of our exposure.
Mary Barra: We believe our product portfolio and continued strong demand for our vehicles positions us ahead of the competition during this period of transition.
Mary Barra: So let me begin by summarizing our Q1 results. Total company revenue for the quarter was $44 billion, up 2% year-over-year, with whole sales also up 2%.
Mary Barra: We achieved $3.5 billion in EBIT adjusted, 7.9% EBIT adjusted margins, and $2.7 billion in, or $2.70 the Hick Sense, and EPS deluded adjusted.
Mary Barra: Are even adjusted was down slightly from last year's key one performance. Let me walk you through some of the key items on the bridge.
Mary Barra: Pricing was up around $900 million a year over a year, demonstrating our ongoing discipline market strategy as well as continued strong demand for our products like the new mid-size SUV family, the Chevrolet Traverse, GMC Acadia, and Buick Enclave as well as our compact SUVs, the Chevy Equinox and GMC terrain.
What's turned to volume and mix? [inaudible]
Speaker Change: Full-style volumes of light-duty full-size trucks declined year-over-year largely due to a few weeks of scheduled downtime at our full-size truck plans for upgrades, along with the effects of the supplier fire that Mary mentioned earlier.
Speaker Change: However, this was more than offset by the Chevy Tracks and Buick and Vista delivering exceptional year-over-year growth, propelling us to a leading position in the US Small SUV segment.
Speaker Change: In EVs, we achieved over 90% year-over-year growth, securing the number two position in the U.S. Models like the Equinox EV are gaining meaningful traction with mainstream customers. Meanwhile, Cadillac continues its momentum with EVs now accounting for 20% of its U.S. sales. [inaudible]
Speaker Change: FX was a headwind of around 300 million dollars in the quarter, primarily attributable to the weakness in the Mexican peso.
Speaker Change: Bix costs were up 400 million dollars year over year due to higher depreciation and amortization, ongoing warranty pressure, and higher labor costs partially offset by the reductions at cruise.
Speaker Change: Relative to warranty costs, we face persistent inflation challenges and are also taking voluntary measures to address the 6.2-liter L87 engine supplier quality issues in some model year 2021 to 2024 vehicles.
Speaker Change: The good news is that dealers have already begun applying the remedy to vehicles in their position. It's the right thing to do for our customers.
Speaker Change: Despite around $500 million of incremental expenses for the L87 in the second quarter, we expect warranty to still be a slight year-over-year tailwind in 2025.
Speaker Change: We're focused on maintaining our cost discipline, comparisons become easier as the year progresses, and we expect fixed costs including crews but excluding depreciation and amortization to be roughly flat year over year in 2025. Now let's move to North America.
Speaker Change: Notwithstanding higher wholesale's quarter over quarter, US dealer inventories were down in part due to a meaningful step up in the SAR throughout the quarter.
Speaker Change: The industry undoubtedly benefited from some pull-ahead demand from customers purchasing vehicles ahead of potential tariff impacts particularly in March but this strong demand has continued into April where we've seen US deliveries up around 20% versus last year.
Speaker Change: Q1 Margin was 8.8% well within our 8 to 10% target range despite the addition of the expenses that were formally approved.
Speaker Change: With respect to our international business, GM International even adjusted excluding China equity income was breakeven in a seasonally low quarter, influenced in part by this year's timing of holidays in the Middle East.
Speaker Change: China equity income reached nearly 50 million dollars. The team in China, including our J.V. partner, have made significant strides in reducing inventory and costs, while also focusing on enhancing the competitiveness of our products. [inaudible]
Speaker Change: Their efforts are yielding results as evidenced by a third consecutive quarter of sequential market share growth, notably sales of our new energy vehicles increase 53% year-over-year.
Paul Jacobson: GM Financial also performed well with Q1 EBT adjusted of almost $700 million in line with last year. Higher provision expense from increased loan origination volume was partially offset by higher net financing revenue and lease vehicle income.
Paul Jacobson: GM Financial continues its proven track record of profitability and consistent capital return to GM, with another $350 million dividend paid during the quarter.
Now let me spend a few minutes on tarot.
Paul Jacobson: Beginning in early April , a 25% vehicle import tariff was imposed. For vehicles that are USMCA compliant, which all of our North American produced vehicles are, the US content is not subject to the tariff once the necessary administrative processes are implemented in the coming weeks.
Mary Barra: Since the election, our manufacturing and supply chain teams have been focused on developing strategies to help mitigate the impact of potential tariffs. These strategies are now actively being put into action. Mary mentioned a few of these examples in her remarks.
Mary Barra: We'll take additional mitigation measures, including cost-production targets where it makes sense to do so. We're reviewing the cost initiatives that were implemented during COVID, but we want to ensure that we don't cut too deep. The environment is very different today than COVID as demand remains quite strong.
Mary Barra: They've also announced tariffs on imported parts. While we source parts globally, our guiding principle is to buy where we build. The US's GM's primary location for sourcing parts supply for US assembly comprising well over half of its annual parts expenditure. The US's GM's primary location for sourcing parts is to buy where we build. The US's GM's primary location for sourcing parts supply for US
Steele and Aluminum are largely source local to production. Thank you.
Mary Barra: We have a proven track record of working collaboratively with our suppliers to navigate industry challenges and we anticipate that this occasion, as we work to increase US sourcing further, will be no different.
Mary Barra: By working together, guided by transparency and trust, we are carefully evaluating the actions we can take with our suppliers to help mitigate the impact on their business.
Mary Barra: One of Tuesday's presidential actions will provide a tariff offset based on the more than 1.5 million vehicles we build in the U.S. each year. This will help mitigate a substantial portion of tariffs on parts going into those vehicles and help avoid added costs on U.S. vehicle production.
Mary Barra: This offset program supplements, but does not replace, continued preferential treatment for USMCA
Mary Barra: The other action will ensure that tariffs on parts don't stack on top of each other. We believe both of these are smart policies that help encourage companies to do more in the US, while also ensuring satisfactory return on invested capital.
Now let's move to our 2025 guidance.
Mary Barra: Based on Q1 results, our underlying business trends remain strong and would have kept us on track with the initial guidance that was given on the Q4 earnings call with better pricing off-setting warranty and FX headwinds.
Mary Barra: Post-clarity from the Presidential Actions of Tuesday, we are expecting a 4-5 billion-dollar impact from terrorists.
Mary Barra: This includes about two billion dollars coming from vehicles we import from Korea, as well as tariffs on vehicle imports from Mexico and Canada in addition to indirect material imports.
Mary Barra: Based on the current commercial environment, our updated guidance assumes we can all set at least 30% of this headwind via self-help initiatives.
Mary Barra: This results in even adjusted in the $10 to $12.5 billion range. EPS diluted adjusted in the $8.25 to $10 per share range, and adjusted automotive free cash flow in the $7.5 to $10 billion range.
Mary Barra: Pricing was strong in the first quarter as well as during the month of April . We now expect pricing to be relatively consistent for the remainder of the year.
Mary Barra: As a result, we expect North American pricing to be up half a point to 1% year over year versus our prior guidance of meaning down one to one and a half percent.
Mary Barra: On the EV side, we have a strong portfolio and saw a significant year over year growth in both volume and US shared in the first quarter. We maintained our number two position in the US market, notwithstanding the US EV industry moderation from the fourth quarter last year to the first quarter this year.
Mary Barra: Going forward, we will continue to remain disciplined and manage EV production in line with demand. Inventory levels for EVs remain reasonable at 78 days at quarter end, and our EV incentives continue to be well below the industry average.
Mary Barra: We are continuing our momentum on EV profitability improvement. In the first quarter, nearly 50% of our entries were variable profit positives.
Mary Barra: The portfolio was near-break even on variable profit, primarily due to a mix of production during the quarter. Going forward, we expect to continue to make progress on our EBIT improvement journey, but the actual year-over-year improvement is going to depend on total volumes and tariffs. [inaudible]
Mary Barra: With crew's operations now included in North America, we are continuing to target at least $500 million in year-over-year savings in 2025 versus 2024.
Mary Barra: We anticipate commodities to be relatively flat year-over-year while rates for steel and aluminum have increased recently, these are somewhat mitigated by our limited exposure to index pricing.
Mary Barra: For GM International, we expect to tear wind from restructuring the China business and are continuing to target profitable equity income for the full year.
Mary Barra: GM International outside of China should be similar to what was delivered in 2024. We expect higher profitability in the second half driven by seasonality and some new launches.
Mary Barra: For Jam Financial, we continue to expect EBT adjusted in the $2.5 to $3 billion range, and we also continue to expect capital expenditures in the range of $10 to $11 billion, including battery JV investments. [inaudible]
Finally, I'd like to turn to Capitol allocation.
Mary Barra: Let me start by reiterating that there is no change to our capital allocation policy. We continue to balance investing in our business, maintaining a strong balance sheet and returning capital to our shareholders.
Mary Barra: Investing in our business to optimize long-term profitable growth remains our top priority.
Mary Barra: Our balance sheet is strong. On April 1st, we paid off $500 million of senior notes which leaves another $1.25 billion maturing later this year. We will assess refinancing opportunities or debt extinguishment as we progress through the year.
Mary Barra: We have also entered into an agreement with Altium Cells to provide a $1.8 billion five-year term loan that will facilitate a full voluntary prepayment of all remaining amounts under the Department of Energy's Advanced Technology Vehicles Manufacturing Load Program.
Mary Barra: We are grateful for the support of everyone at the local, state, and federal level who helped make these plans possible. Going forward, the JV's simplified capital structure will allow it to grow and evolve with even greater flexibility.
Mary Barra: Back in February , we announced a $2 billion accelerated share repurchase or ASR retiring 33 million shares immediately.
Mary Barra: The total number of shares ultimately repurchased under the ASR program will be determined upon final settlement, which is expected to conclude this quarter.
Mary Barra: We ended the first quarter with a deluded share count of 983 million shares, down 15% compared to the end of the first quarter last year.
Mary Barra: GM has 4.3 billion dollars of capacity remaining under its share repurchase authorization, but we are temporarily pausing additional repurchases until we have more certainty with respect to our operating environment.
Mary Barra: Inclothing, I want to express my sincere gratitude to every member of the GM team for delivering another great quarter.
Mary Barra: Although the current environment poses challenges, we will navigate this evolving landscape with the same agility and resilience that have defined our successful responses to past industry disruptions. Thank you, and we'll now move to the Q&A portion of the call.
Speaker Change: Thank you. As a reminder to analysts, we are asking that you limit your questions to one and a brief follow-up so that we may get to everyone on the call. To ask a question, press star and then one on your telephone keypad to join the queue. To withdraw your question, press star and then two.
Speaker Change: Our first question comes from Itay, McCally, with TD Cowan, your line is open.
Great. Thank you. Good morning, everyone .
Speaker Change: To just add one tariff question and one follow-up on tariffs with this week's relief on parts tariffs, there's scope for the industry to also receive similar relief on the imported vehicle tariffs. And to that, how should we think about the plan and for full mitigation of tariffs and maybe how long it would take roughly?
Speaker Change: Hey, good morning, Itay. Thanks for the question. You know, look, as we said in the comments, you know, the environment remains fluid and we're hopeful that the administration is going to continue to work.
Speaker Change: on trade agreements across the world and will continue to assess that going forward.
Speaker Change: As far as all sense, I think we've said it will take a little bit of time to implement particularly the
Speaker Change: and any manufacturing or supply chain moves. And I think that was evident in what the president did with, you know, kind of two-year rolling relief here with the offsets. And we're going to work actively to try to find the optimal way to do that across the board. We've really looked at our addressing the tariffs or offset mitigation in three buckets. One is go to market. When you look at where the environment is right now,
Speaker Change: Powell, you know, we feel good about where pricing is versus where we started the year. And that's been evidenced by what you saw in the first quarter as well as what continued into April . So we've assumed pricing remains constant from here. We, you know, we do expect the start to come down a little bit off of the. We, you know, we, we, we, we, we, we, we,
Speaker Change: off of the peaks that we're seeing right now, but still in line with our full-year target that we started with about 16 million units for the rest of the year. The second bucket is cost reductions. As we've talked about, we've pulled out the COVID playbook. It'll take some time to roll those things in. We don't want to panic, we don't want to overcut, because it is a very different environment than COVID, and we want to make sure that we're investing in our great product portfolio.
Speaker Change: And then lastly is the footprint responses and supply chain responses, etc. That's what's going to take a little bit of time. So as we continue to go through, we'll provide more detail on our progress on each of those.
Speaker Change: That's a very helpful, Paul Minette, a quick follow-up, and a big picture question. You know, with all these disruptions we've seen in a new vehicle production in the last four years, has that shaped your pace of investments in AV and AI to capture more of that installed based revenue? You'll be too bad if you could provide a book, but an update on the timing of the next trend, software-defined vehicle platform, and it'll be some of the L3 offerings you're working with the cruise team. Thank you. Thank you.
Speaker Change: and a team into working with the GM team and it's going quite well. We're going to talk more about what the timeline is for the software-defined vehicle as well as continuing to make improvements and getting to L3 from an AV technology perspective. What we're committed to do in the meantime is to keep adding features to supercruise. Hopefully everybody saw that it was just stated as the best driver assistance technology by voter trend. And we're going to continue to add features like we have towing right now. No one else in the end.
Paul Jacobson: Stry has towing with their L2, so we can go to L2, our L2 plus, and then on the way to three. So we'll share more about the actual timing for it in the. We'll see you in the next video.
Speaker Change: Services and things that our customers will value. So that's all on the way to the whole next generation of SDV. So again, more to follow on that later in the year. And then your first, the first part of your question, itay was
Speaker Change: Yeah, just to the pace of A.V.A.I. investment, it's not like you're exhilarating those are in line of all the disruptions we've seen in the last few years. [inaudible]
Speaker Change: A.I., who's working across each area of the business and each of my direct has a goal to demonstrate how they're leveraging A.I. to either improve the way we do business or the cost of how we do business. So very active on that front.
terrific, that's all very helpful, thanks so much Thank you [inaudible]
Speaker Change: Thank you. Our next question comes from Joe Spak, with UBS, your line is open.
Thank you very much.
Speaker Change: and details on some of the guidance. So, you know, the guidance was lowered by three and a half billion.
Speaker Change: Seems like you're saying about a 4.5 billion tire of impact. I'm assuming that's...
Speaker Change: The gross number but includes the reimbursement mechanism but if you could confirm that and then the 30% mitigation you said is from self-help . . .
Speaker Change: Does that include the pricing or not, because the pricing assumption looks to be like...
Speaker Change: plus 3 billion versus the prior guide. So if that's the case, I'm just wondering what maybe some of the other offsets are. It doesn't sound like volume is that much of a change. I don't know if there's anything in warranty or I know you sort of change some of the language on EV improvement as well, so maybe you just help us with some of those factors.
Speaker Change: Yeah, good morning, Joe. So first of all on the tariff calculation, it really is a straight forward to four to five billion dollars, which is the expected tariff after the actions, including the offset mechanism that the president signed.
Speaker Change: with reduced by 30% which is our self-help initiatives that I described earlier. So that was the metric that we did and kind of rounded it.
Thank you very much.
Speaker Change: Okay, perfect. And that's a good segue to the second question, which is...
Speaker Change: I know you're simply impracing holes, I guess it is obviously, I think it changed versus what your guidance was before but even going forward and holding it at this level.
Potential Pricing Actions going forward. Um...
Speaker Change: especially given what maybe some competitors might do. So you know, is there? Yeah.
Speaker Change: Greater risk that there's pricing actions because there's obviously sort of different cost structures in the industry versus what was even a couple months ago.
Reising our own go-to-market approach we've continued to get share.
Speaker Change: in the industry, and we've done it the right way. We've expanded margins, we've reduced incentives, we're not buying shares coming to us because of our vehicle portfolios. So, you know, we've seen other actions by competitors, including discounting, that might continue. But at the end of the day, our strategy has worked really, really well for us, and it's that disciplined approach that I think has led to our outperformance relative to others. Thank you very much.
Thank you
Speaker Change: Thank you. Our next question comes from Emmanuel Rosner with both research. Your line is open.
Thank you so much. Just to make sure I, I understand,
Speaker Change: The the tire fog says, can you just give us a little bit more color on what is going into that 30% plus?
Speaker Change: Offset from Stealth Health, is it truly sort of like that discipline pricing? Is it cost? What sort of cost are you able to?
Speaker Change: Takeout quickly so that you would still get all that benefits within 2025. So I guess broadly what goes into those tariff offsets for this year.
Thanks, Emmanuel, and it's all said, it is self-help, it's...
One.
taking steps like we did to... Bye!
Speaker Change: Add volume to Fort Wayne to build 50,000 more full-sized trucks on an annualized basis. That's already in place.
Speaker Change: More content in the United States that improves the tariff position. And there's things like that that work and continue to look and do. Then it's working with our supply base to make sure their USMC compliant first off. But then to look for opportunities with our suppliers where we can leverage capacity in this country that they have to build more from a US perspective. And then as Paul said, that there's a lot of work to do.
Speaker Change: is disciplined within the company. You know, as we face a challenge like this, it's we [inaudible]
Speaker Change: Delivered the message even as we ended last year and we reinforced it earlier in the week.
Paul Jacobson: that we need everybody to show great discretion on discretionary spending, and that message is resonating. So we're going to be effective. We're going to, Paul said, continue to invest in our great product portfolio, both ICE and EV. Our investments in EV will be primarily focused on improving our cost structure.
Paul Jacobson: So there's a lot of things that we can do to build on what is already a very strong greater than 80% USMCA compliant and the lion share that is US content. We're going to continue on what we've been doing from a battery raw materials and supply chain resiliency as I mentioned in my remarks.
Paul Jacobson: Those steps that we took and started a couple of years ago are going to pay off this year and into next year and then into even 27 from a lithium perspective. So it's just fundamentally having a resilience supply chain and as Paul said, it's...
Paul Jacobson: from a supply perspective, it's by where we build. So it's working on improving US content and it's being very cost-focused.
Speaker Change: Yeah, thanks for the collar. And then as we looked beyond this year, can you?
Paul Jacobson: Can you confirm this, you know, four to five billion impact? This is essentially what you're getting from...
Phobak Kohli.
Nine Months
Speaker Change: of the year. So you would have potentially something larger, sort of like as you move forward and therefore need.
Potentially larger offsets and this contest. Okay.
Speaker Change: In the focus of what you would be considering in terms of larger offsets, I'm particularly curious if this room...
to reduce fixed costs within...
Speaker Change: The EV spend in particular, obviously the administration is relaxing their rules. The Congress seems to be potentially going after even California's ability to have its own waiver. And so does that enable you potentially to take some fixed costs out on the powertrain side and on the EV investment? And so does that enable you potentially to take some fixed costs out on the powertrain side and on the EV investment?
Speaker Change: Well, Emmanuel, you raised a really good point, and we are monitoring carefully what's happening from a admissions regulatory perspective.
But right now nothing's changed. [inaudible]
Speaker Change: And so we need to make sure that we're compliant until whatever actions are taken from a reconciliation process or what actions are taken by the EPA and NHTSA. We are evaluating our spend, and as I already mentioned, we're going to focus on how do we make our EVs more cost effective.
Speaker Change: We reaffirmed our capital being in that 10 to 11 range. And so we're going to work within that as we deploy smart capital that's going to generate the right return that may be increasing what we do in the US.
Speaker Change: continuing to invest in our strong internal combustion engine portfolio and improving the efficiency of our EVs. But we're going to work within our dollar amounts, so you could make the conclusion as we deploy some capital from an investment in the US perspective that's going to have to come from somewhere, but we think we can do what we have planned to do with all three of those components within the guidance we already gave.
Speaker Change: and so that's what we're focused on doing, but making bigger, broader decisions, it's not really smart to do that until we really know what the regulatory environment's going to be, because as you well know, the cost of non-compliance.
Speaker Change: that varies across the different agencies is pretty significant. So we're going to work on compliance until the regime changes.
Speaker Change: Thanks so much, and I'm talking just confirm on the 435 billion dollars is that net or gross of these 30% mitigation and is that a am I correct in understanding that on a full year basis this would be larger?
Speaker Change: Emmanuel, the $4 to $5 billion is our estimated impact after the President's actions for 2025. It does not include the 30% offsets that we talked about. And lastly, we're not giving any color on 2026. There are lots of things that are going to change between now in 2026 and we'll provide more detail as the environment continues to evolve.
Great, thank you.
Speaker Change: Thank you. Our next question comes from Dan Levy, with Bart Clay's, Your Line is Open.
Hi. Good morning. Thank you for taking the questions.
Dan Levy: I wanted to double-click on volume, please. Maybe you could just unpack the views on Solich said you still think can be $16 million and then maybe you can address just from the volume perspective.
Speaker Change: You know, just under half of the vehicle we sell in the U.S. are assembled outside of the U.S. How do you manage those specifically the appointment products and those that are coming from Korea? Thank you.
Speaker Change: Yeah, so Dan, I'll take the first part. You know, our assumption on, you know, Saur for the rest of the years is essentially reverting back to our business plan. So, you know, we've obviously enjoyed a nice tailwind with March, you know, being just above 18 April approaching 18 from the early numbers here. But we're recognizing that there's there's a lot of activity there and we're obviously watching the. Yeah.
Speaker Change: Macro Environment, Carefully as well. No reason to believe that we won't see it kind of go back to what we were expecting for the year, but you know if it if it.
Speaker Change: Continue to run higher. I think we'll enjoy that and I think we'll be positioned to do that with where our inventory sits today, but we're not banking on it. So we want to make sure that we're approaching the rest of the year as we thought. Adjusted for the pricing environment that we've seen in the first quarter.
Speaker Change: Yeah, and as it relates to the footprint and the fact that we do have...
Speaker Change: Williams going on with very important trading partners. We're going to monitor how those situation goes. We have access capacity in the US with the plants that we already have. And so that allows us, if we want to make adjustments, we can do it faster than a greenfield. And we can leverage. [inaudible] We're going to monitor how the plants work. We're going to monitor how the plants work. We're going to monitor how the plants work.
Speaker Change: Leverage the assets that we already have and that gives us speed and makes it at lower cost. So there's a lot of levers that we can pull. You've seen us do one already with the full size truck. We'll be announcing more as we go forward. I'm not sharing any more specific details today, but we'll adjust and our commitment to our investors and our owners is that we're going to be smart in the way we deploy capital to respond to a different and changing environment.
Speaker Change: Okay, thank you. I'll just follow up and maybe just touching on that, Mary, you know, I see that the cat backs outlook.
is unchanged, and I think many of us have interpreted.
Speaker Change: The policy changes are the way the drives are increased.
Speaker Change: Final Assembly in the country, which would then require you to move. [inaudible]
Speaker Change: Fair amount of your footprint. So maybe you can just address AY, the near-term CAPX Outlook and...
Unchanger, you're just waiting for more. Thank you very much.
certainty on policy and be
Speaker Change: If you are to start moving final assembly to the US, how should we think about...
Speaker Change: The timing of those moves, what's easier, what's harder, and what the cost is.
Speaker Change: Yeah, hey Dan, I'll take a shot at that. So, you know, look, we've been pretty clear about how we're looking at capital and, you know, we've determined 10 to $11 billion is the right amount to spend.
Speaker Change: you know obviously things happen that change priorities and we have to we have to meet and respond to that so I think we're going to continue to do that and I think we'll endeavor to to keep it in that range across the board and you know you're you're right in your observation that
Speaker Change: Every decision on production and capacity is an independent one. They all have different variables and...
Speaker Change: We've got to work through that, but we will prioritize and optimize, based on what gives us the biggest return going forward and what's the right timing.
Speaker Change: based on our product cycles and where we are in production, et cetera, to be able to make those calls and we'll manage capital responsibly.
Dan Levy: Yeah, and just to add what Paul said, agree 100%. We already have run, we were running many different scenarios that started last year.
Speaker Change: and so we have several things that are underway. We're just not going to announce them today because there's more work to do as we balance all of that, but again, we're going to be responsible with our capital.
Okay, thank you.
Speaker Change: Thank you. Our next question comes from Mike Ward with City Research. Your line is open.
Thanks very much. Good morning everyone. Good morning. [inaudible]
Speaker Change: We've certainly been the negative aspects of the tariff situation all over the media and everywhere else, and I'm just wondering what would be the best case scenario for you?
Speaker Change: If something came out, like if you SMCA is renegotiated a year early, what impact does that have on you?
Speaker Change: Well, it's hard to say not knowing what what what will be done and we have no control over when USMCA is renegotiated but what I can tell you is when it was renegotiated during President Trump's first term.
Speaker Change: I think we're going to be well situated, but we're going to continue to drive that up. I'm sure we'll have a voice into the negotiations when they happen, and so we'll manage it just like we did last time and, you know, very proud of the fact that all of our vehicles built in North America are USMCA compliant and the parts that we put into our vehicles in the US are more than 80% USMCA compliant. Thank you very much.
Speaker Change: The second thing is, one of the areas that's been surprisingly on the positive side of the West.
Speaker Change: Four or five years has been cast generation of General Motors. [inaudible]
Speaker Change: I know you pulled forward the Sherry Richardson in the first quarter, but what would it take to basically put that back on from, you know, a market standpoint?
Speaker Change: Hey Mike, good morning and congratulations on your new your new shingle that you hung.
Speaker Change: You know, I'm actually incredibly proud of the team on cast generation. I think number one, it starts with the vehicle portfolio when you look at
Speaker Change: the quality and demand that we've had for our vehicles.
Speaker Change: Over the last few years as we've refreshed that fleet, it really is a strong anchor for great financial performance. I think we've done a lot in terms of our go-to-market strategy approaching it with more discipline in production, inventory management, as well as making sure that we were pricing our products appropriately and not necessarily over indexing into incentives. And I think the entire commercial team.
Speaker Change: Kim deserves a lot of credit for that in terms of really improving the margin performance and underlying operating cash flow of the business. [inaudible]
Speaker Change: Then when you combine that with, you know, I know we've been criticized in the past for capital expenditures, but if you look at our capital expenditures today, they're, they're roughly approximate to where they were in 2017, 2018, after adjusting for the inflationary pressures that we've seen over the last few years. So, you know, I think that discipline cap acts on top of the really strong operating performance from the vehicle portfolio is really deceitful and we've got to continue to harness that. [inaudible]
as far as the Sherry purchase. Thank you.
You know, the banks, the counterparties that we're in. [inaudible]
Speaker Change: The ASR that we did in February are still in the market and that transaction will settle and it gives us a little bit of time.
Speaker Change: to evaluate the macro environment and kind of where we are, where we were.
Speaker Change: and where we sit. What I would say is that the actions taken by the President this week do a lot to sort of resolve the uncertainty of the tariff environment. And we're making good progress in terms of figuring out where we sit, and I think the guidance that we put out today is evidence of that. Thank you very much.
Thank you very much.
Thanks Mike.
Speaker Change: Thank you. Our next question comes from Adam Jonas with Morgan Stanley . Your line is open.
Adam Jonas: A. Thank you for the morning, Mary and Paul. A question on supercruise.
Adam Jonas: You mentioned in the deck, you increased the population by 230,000 units year on year. So can you confirm how many are on the road right now collecting data and total and curious anything you wanted to highlight there in terms of rate of change on supercruise? [inaudible]
Speaker Change: It seems like the Waymo Toyota collaboration on autonomous solutions and data collection is part of validation of your thesis and approach and I have a follow-up question. Thanks.
Speaker Change: Okay, just, you know, you're correct in that we added the 230,000 units. Let us see if we can quickly get what that takes the total volume up to, but as we said, we're committed to doubling that this year and we're on track because we had 100% year over year from a supercruise perspective. And yes, appreciate your comments. Again, personal autonomy we think is so important.
Speaker Change: As we move forward, and that's why it was so important to get the team really focused on what it takes to lead from a personal autonomy perspective. So the team is doing that. We have many new members of the team and now that we're on the GM side and now when you combine them with the cruise team, I'm very excited about the progress. In fact, I'm going to be out there next week to do a deep dive in that review.
Speaker Change: and they're telling me, by the calendar year end, we'll have over 700,000 vehicles that are cruise equipped.
Supercrisic Clip. [inaudible]
Adam Jonas: You know, one of my regrets fair Adam is that during the semi-conductor shortage, we...
Adam Jonas: We had a trace of build without Super Freeze or not build. [inaudible]
Speaker Change: and so we're catching up quickly from that right now so that's why you see the growth this year but we're committed to autonomy and continuing to improve with what we can do year by year and again we'll hear more about that later in this year but the team is working really well.
Speaker Change: Thanks, Mary. Yeah, when I got my Tahoe, which I absolutely adore, unfortunately a super cruise is not available.
Speaker Change: At that time, I like my Tesla, but for the record I love my Tahoe. I love you, I love you, I love you, I love you,
Mary Barra: The follow-up question, Mary. We have super crews equipped Tahoe's right now, so happy to introduce you to a dealer who could sell one to you, if you'd like. I don't want the neuroshell people are great. We'll get talking to them.
Okay, question my follow-up, how do the tariff changes? [inaudible]
Speaker Change: and a couple of with the advancements in AI and robotics, impact GM's approach to automation and many of your global competitors.
Bethos, Tesla BYD, Xiaomi, Huawei, even Hyundai Key, etc. They're looking at things like humanoid robotics and as you work with NVIDIA...
Speaker Change: and following the hiring of Barack Trawski or new Head of AI. Bye.
Speaker Change: It is GM exploring humanoids in terms of either labor substitution or even making these robots and developing them given your expertise in complex supply chain and scale manufacturing equality or any other form factors or comments on automation you'd like to share. Thanks Mary.
Speaker Change: Yeah, I think we're looking at efficiency and great efficiency all the way to the plant floor starts with smart design of the vehicles and then how you design the vehicles and how they can be put together.
Speaker Change: very efficiently and good for the workforce. We've focused a lot already and have tremendous expertise within the company of using automation robots, co-bots.
Speaker Change: To really focus on the difficult to do jobs of putting a vehicle together and when they're difficult to do, you generally then get quality issues and you cause ergonomic issues. So we are going to continue on smart design starting with the way the vehicles are built.
all the way through to the factory floor. We do have extensive knowledge and work going on and several partnerships.
Speaker Change: as we look at what is the latest technology to make sure we're efficient and we compete and and protect our workforce from a safety perspective. So the answer is yes on all of those friends, but I did really want to reinforce it starts with designing the product well so it's it's easy to build and therefore then you can leverage automation where it makes the most sense.
Thanks very much.
Speaker Change: Thank you. Our next question comes from Daniel Roeska, but Bernstein, your line is open.
Speaker Change: All right, good morning, Mary Barra, thanks for taking the question. And I invite you to take a longer-term view with tariffs in place. The cost curve for ports is now higher. The demand for ports out of the US and US MCA complied will be higher too.
Speaker Change: In your mind, as you're preparing for your next round of supplier discussion, what would prevent suppliers from raising prices on US and USMCA parts to capture some incremental margin here as long as the tariffs are in place?
Speaker Change: Well, Daniel, we have worked hard over the last decade to have a very positive relationship with our suppliers and not make a transactional of sharing the pie, of who gets more of the pie versus how do we take cost-outs, drive more efficiency, leverage the good ideas that they have and incorporate it into our vehicles faster. So frankly, I would be disappointed if suppliers, especially with USMCA compliant, they're going to try to...
Speaker Change: Leverage, this as a margin expansion and frankly I don't think our suppliers will
Speaker Change: We work regularly, there is going to be some pressure on our supply base but again...
Speaker Change: As we approach it we always look for how do we together look at making the business more efficient less than a month ago we had our supplier of the year where we had our top suppliers together we had conversations and breakouts about how do we work on this together so that's the way we're going to focus on this not only this year but
into the indefinite future.
Speaker Change: And so maybe as a follow up, is there, is there a risk that there may be suppliers in your network?
Speaker Change: kind of the parts cost to be a little bit higher in the initial phase as suppliers kind of document the USMCA compliance and you then get to exclude those parts.
Speaker Change: Well, we're working to help them do that because it's in both of our best interests.
Speaker Change: During COVID, during the semi-conjecture shortage, and as we move forward. So, you know, I'm not going to comment on, you know, is there going to be zero. But again, we're going to be very thoughtful and first look to see how do we offset and how do we work together to make it more efficient. We've been actually doing some great work with the supply base of really encouraging and getting them involved earlier in our vehicle design so we can take advantage of their best ideas. Thank you very much.
Speaker Change: and that's where you really get the savings versus if you're if you're talking about looking at it at the end.
Speaker Change: You're not driving the efficiency that you need to have. We're very much bringing them further left in our development process so we can both win together. And when we have great vehicles that sell well in the marketplace like you're seeing right now, that's best for our suppliers too.
Dickson, Stakes,
Thank you.
Adam Jonas: Good morning everybody. I just wanted to ask maybe a positive question on Terrace Mary. As you think about your product cadence going forward and the products that you're going after, just curious if there's been any significant changes, because as we look at this, the German looks...
Adam Jonas: Brands are widely disadvantaged and so are really the Korean sort of in the mid-level of a market so it seems like there may be a real opportunity for Cadillac and Chevrolet to really kind of lean into this and not just maybe take price but really take market share.
Uh...
Adam Jonas: John , I thank you, first of all, thanks for the question. I think you bring up a very good point. We do build, um...
Adam Jonas: You know, what is it over 1.5 million units in this country and some of our most important where we lead in market share and we're growing share already with a 30 with the new newly redesigned full size SUVs that are built in Texas. We saw a 30% growth.
Adam Jonas: and the Escalade as well with both the Escalade and the Escalade IQ built in Texas and Michigan. So there is huge opportunity for us to continue to build and leverage our product strength and the fact that these vehicles are built in the U.S. and have the U.S. M.C.A. compliant. In fact, Ad.
Adam Jonas: You know, what we've just seen is the best April since 2007. So I think there is upside opportunity for general motors in both ICE and EV and believe we were going to leverage every single opportunity.
Adam Jonas: And then maybe I get to take one last one on the tariff side, sort of from the other side of the equation is, I mean you guys are operating incredibly well in a very tough environment, $10 to $12 billion, $12.5 billion on EBIT should be commended, you put a $4 or $8 a share.
Adam Jonas: out there, you're raising the dividends, you're moving some manufacturing back to the US.
from the administration's perspective as they look at this. [inaudible]
You're a success story, you're certainly not a...
Adam Jonas: Company, in trouble by any stretch of imagination, you're succeeding in a tough environment.
Speaker Change: As you're talking to them and working on maybe some further relief from tariffs, I mean what kind of leverage or angle are you using with them? Because the reality is given the current state of affairs, you're still doing fairly well. So I'm just curious as you have these discussions and maybe hope for relief or push for relief. [inaudible]
Adam Jonas: You know, how do you kind of position yourselves in that discussion?
Adam Jonas: Well, I think one is we're committed to the United States. As I said in my opening remarks, we have more employees in this country than anyone else. We provide over 45,000 and growing good-paying jobs from a represented perspective that really the industry created the middle class and will continue to do that. So I think that, um, you know, we're going to do that. We're going to do that. We're going to do that. We're going to do that.
Adam Jonas: when we look at everything that's going on, and I think you brought a lot of really good points.
Adam Jonas: We want to be in a position where we're 100% goal aligned with the president is to have a strong US auto industry and so we have made points of what it takes for us to do that in grow share and then have a level playing field so we can we can grow from an export perspective. [inaudible]
Adam Jonas: So what we're going to do is continue to leverage the strong product portfolio that we have. Continue, we've made the point.
Adam Jonas: We need to have a generate enough that we can reinvest in the business to continue to have strong product programs and so we're just going to continue to keep
Executing,
Speaker Change: He had a very strong goal to strengthen manufacturing in this country. We want to be a part of it.
Speaker Change: So, we haven't thought of this as a chaotic environment. We've looked at it as, okay...
Speaker Change: Anderson, which will be good for America in the long term. And lastly, I'll just say, when you think about our industry, it's not only important from an economic security perspective, it's important from a national security perspective. And we've had those conversations as well. But thank you, John , for both of your questions. Thank you very much. Thank you.
Speaker Change: Thank you. I would now like to turn the call over to Mary Barra for her closing comments.
Mary Barra: Well, I really appreciate, first of all, everybody's flexibility as, again, I want to reiterate, we changed this call because we really wanted to provide the best guidance that we could and we had a good sense that after the actions taken by the administration were announced, we would be able to share with you our guidance for the year which is exactly what we did. Thank you very much.
Mary Barra: We're going to continue to work to strengthen our business. I think you've got a leadership team that is committed to being agile and flexible, focusing on what's important in this industry and that's having strong product.
Mary Barra: because at the end of the day, the product is what gets, earns you more customers, earns you more share.
Speaker Change: Make sure you're positioned with the supply-based, very strong, and continue to...
Speaker Change: to build on the loyal to that we have in the United States.
Speaker Change: and we look forward to continuing to grow this business. We've grown for the last three years and continuing to deliver returns to our shareholders. That's what we're focused on. We will continue to be good stewards of you, our owners capital, and we appreciate your interest today and your support. So thank you all very much.
Speaker Change: That concludes the conference call for today. Thank you for joining the conference.