Q2 2026 General Motors Co Earnings Call

July 21, 2026

Speaker #1: The questions to one and a brief follow-up. To ask a question, press star then 1 on your telephone keypad to join the queue. To withdraw your question, press star then 2.

Speaker #2: Good morning, and welcome to the General Motors Company second quarter 2026 earnings conference call. During the opening remarks, all participants will be in listen-only mode.

Operator: Good morning. Welcome to the General Motors Company Q2 2026 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. We are asking analysts to limit their questions to one and a brief follow-up. To ask a question, press star then one on your telephone keypad to join the queue. To withdraw your question, press star then two. As a reminder, this conference call is being recorded Tuesday, 21 July 2026.

Operator: Good morning. Welcome to the General Motors Company Q2 2026 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. We are asking analysts to limit their questions to one and a brief follow-up.

Speaker #1: As a reminder, this conference call is being recorded. Tuesday, July 21, 2026. I would now like to turn the conference over to Ashish Kohli, GM's Vice President of Investor Relations.

Speaker #2: After the opening remarks, we will conduct a question-and-answer session. We are asking analysts to limit their questions to one, with a brief follow-up. To ask a question, press star then 1 on your telephone keypad to join the queue.

Speaker #2: Thanks, Julie. And good morning, everyone. We appreciate you joining us as we review GM's financial results for the second quarter of 2026. Our conference call materials were issued this morning and are available on GM's Investor Relations website.

Operator: To ask a question, press star then one on your telephone keypad to join the queue. To withdraw your question, press star then two. As a reminder, this conference call is being recorded Tuesday, 21 July 2026. I would now like to turn the conference over to Ashish Kohli, GM's Vice President of Investor Relations.

Speaker #2: To withdraw your question, press star then 2. As a reminder, this conference call is being recorded. Tuesday, July 21, 2026. I would now like to turn the conference over to Ashish Kohli, GM's Vice President of Investor Relations.

Speaker #2: We are also broadcasting this call via webcast. Joining us today are Mary Barra, GM's Chair and CEO, along with Paul Jacobson, GM's Executive Vice President and CFO.

Operator: I would now like to turn the conference over to Ashish Kohli, GM's Vice President of Investor Relations.

Speaker #3: Thanks, Julie, and good morning, everyone. We appreciate you joining us as we review GM's financial results for the second quarter of 2026. Our conference call materials were issued this morning and are available on GM's Investor Relations website.

Ashish Kohli: Thanks, Julie. Good morning, everyone. We appreciate you joining us as we review GM's financial results for the Q2 2026. Our conference call materials were issued this morning and are available on GM's investor relations website. We are also broadcasting this call via webcast. Joining us today are Mary Barra, GM's Chair and CEO, along with Paul Jacobson, GM's Executive Vice President and CFO. Susan Sheffield, President and CEO of GM Financial, will also be joining us for the Q&A portion. On today's call, management will make forward-looking statements about our expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include the factors identified in our filings with the SEC. Please review the safe harbor statement on the first page of our presentation, as the content of this call will be governed by this language.

Speaker #2: Susan Sheffield, President and CEO of GM Financial, will also be joining us for the Q&A portion. On today's call, management will make forward-looking statements about our expectations.

Speaker #2: These statements are subject to risk and uncertainties that could cause actual results to differ materially. These risks and uncertainties include the factors identified in our filings with the SEC.

Speaker #3: We are also broadcasting this call via webcast. Joining us today are Mary Barra, GM's Chair and CEO, along with Paul Jacobson, GM's Executive Vice President and CFO.

Speaker #2: Please review the safe harbor statement on the first page of our presentation as the content of this call will be governed by this language.

Speaker #3: Susan Sheffield, President and CEO of GM Financial, will also be joining us for the Q&A portion. On today's call, management will make forward-looking statements about our expectations.

Speaker #2: And with that, I'm delighted to turn the call over to Mary.

Ashish Kohli: On today's call, management will make forward-looking statements about our expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include the factors identified in our filings with the SEC. Please review the safe harbor statement on the first page of our presentation, as the content of this call will be governed by this language. With that, I am delighted to turn the call over to Mary.

Speaker #3: Thanks, Ashish, and good morning, everyone. Today we reported another solid quarter driven by the tremendous appeal of our product portfolio: the agility of our team, and discipline execution across the business.

Speaker #3: These statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include the factors identified in our filings with the SEC.

Speaker #3: Our employees are dealers and our suppliers are all making important contributions that continue to drive our success. Their commitment enables us to win in a dynamic market, and their efforts are leading us to raise our 2026 guidance for the second time this year.

Speaker #3: Please review the Safe Harbor statement on the first page of our presentation, as the content of this call will be governed by this language.

Speaker #3: And with that, I'm delighted to turn the call over to Mary.

Ashish Kohli: With that, I am delighted to turn the call over to Mary.

Speaker #4: Thanks, Ashish, and good morning, everyone. Today we reported another solid quarter, driven by the tremendous appeal of our product portfolio, the agility of our team, and disciplined execution across the business.

Mary Barra: Thanks, Ashish, and good morning, everyone. Today, we reported another solid quarter, driven by the tremendous appeal of our product portfolio, the agility of our team, and disciplined execution across the business. Our employees, our dealers, and our suppliers are all making important contributions that continue to drive our success. Their commitment enables us to win in a dynamic market, and their efforts are leading us to raise our 2026 guidance for the second time this year. The business continues to perform very well. Customer demand in North America remains steady, including for our pickups and SUVs, and pricing is consistent.

Speaker #3: The business continues to perform very well. Customer demand in North America remains steady, including for our pickups and SUVs, and pricing is consistent. For example, despite lower-than-target inventories for most of the year, our share of the U.S.

Speaker #4: Our employees are dealers and our suppliers are all making important contributions that continue to drive our success. Their commitment enables us to win in a dynamic market, and their efforts are leading us to raise our 2026 guidance for the second time this year.

Speaker #3: full-size pickup market stands at more than 42% through the first half of the year, which is more than 10 percentage points above our closest competitor.

Mary Barra: Their commitment enables us to win in a dynamic market, and their efforts are leading us to raise our 2026 guidance for the second time this year. The business continues to perform very well. Customer demand in North America remains steady, including for our pickups and SUVs, and pricing is consistent.

Speaker #3: And we grew share year-over-year in both the second quarter and the first half. We also achieved our best quarter and first half ever for the new Super Cruise Equipped Vehicles, strong commercial demand helped us deliver record full-size pickup deliveries in our fleet business, and our U.S.

Speaker #4: The business continues to perform very well. Customer demand in North America remains steady, including for our pickups and SUVs, and pricing is consistent. For example, despite lower-than-target inventories for most of the year, our share of the U.S.

Mary Barra: For example, despite lower than target inventories for most of the year, our share of the US full-size pickup market stands at more than 42% through the H1 of the year, which is more than 10 percentage points above our closest competitor, and we grew share year-over-year in both the Q2 and the H1. We also achieved our best quarter and H1 ever for the new Super Cruise-equipped vehicles. Strong commercial demand helped us deliver record full-size pickup deliveries in our fleet business, and our US incentive spend has remained well below the industry average for more than three years. GM International, inclusive of our China joint ventures, was also profitable.

Speaker #3: incentive spend has remained well below the industry average for more than 3 years. GM International, inclusive of our China joint ventures, was also profitable.

Speaker #4: full-size pickup market stands at more than 42% through the first half of the year, which is more than 10 percentage points above our closest competitor, and we grew share year-over-year in both the second quarter and the first half.

Speaker #3: Our 8.6% EBIT adjusted margin in North America was up 2.5 points from a year ago, and we continue to strengthen our product portfolio, grow software and services revenue, lower our warranty costs, reduce EV losses, increase operating efficiency, and develop new revenue opportunities that drive improved results this year and going forward.

Speaker #4: We also achieved our best quarter and first half ever for new Super Cruise-equipped vehicles. Strong commercial demand helped us deliver record full-size pickup deliveries in our fleet business, and our U.S.

Mary Barra: We also achieved our best quarter and H1 ever for the new Super Cruise-equipped vehicles. Strong commercial demand helped us deliver record full-size pickup deliveries in our fleet business, and our US incentive spend has remained well below the industry average for more than three years. GM International, inclusive of our China joint ventures, was also profitable.

Speaker #4: incentive spend has remained well below the industry average for more than three years. GM International, inclusive of our China joint ventures, was also profitable.

Speaker #3: This strategy has driven 70 basis points of total company margin expansion over the last 3 years, while our broader peer set has seen margin reduction by 400 basis points.

Speaker #4: Our 8.6% EBIT adjusted margin in North America was up 2.5 points from a year ago, and we continue to strengthen our product portfolio, grow software and services revenue, lower our warranty costs, reduce EV losses, increase operating efficiency, and develop new revenue opportunities that drive improved results this year and going forward.

Mary Barra: Our 8.6% EBIT adjusted margin in North America was up two and a half points from a year ago, and we continue to strengthen our product portfolio, grow software and services revenue, lower our warranty costs, reduce EV losses, increase operating efficiency, and develop new revenue opportunities that drive improved results this year and going forward. This strategy has driven 70 basis points of total company margin expansion over the last three years, while our broader peer set has seen margin reduction by 400 basis points. All of this includes the impact of tariffs. We haven't made excuses. We've just continued to perform. At the same time, our operating discipline has been a key driver of the structural improvement in our adjusted automotive free cash flow generation, which has improved from $3 to 5 billion annually on average over the last decade, to consistently above $10 billion since 2022.

Speaker #3: All of this includes the impact of tariffs. We haven't made excuses. We've just continued to perform. At the same time, our operating discipline has been a key driver of the structural improvement in our adjusted automotive free cash flow generation, which has improved from 3 to 5 billion dollars annually on average over the last decade to consistently above 10 billion dollars since 2022.

Speaker #4: This strategy has driven 70 basis points of total company margin expansion over the last three years, while our broader peer set has seen margin reduction by 400 basis points.

Mary Barra: This strategy has driven 70 basis points of total company margin expansion over the last three years, while our broader peer set has seen margin reduction by 400 basis points. All of this includes the impact of tariffs.

Speaker #3: We expect these trends will continue to strengthen our performance into 2027 and beyond, because we have multiple engines of margin expansion and growth while maintaining our capital discipline.

Speaker #4: All of this includes the impact of tariffs. We haven't made excuses; we've just continued to perform. At the same time, our operating discipline has been a key driver of the structural improvement in our adjusted automotive free cash flow generation, which has improved from $3 to $5 billion annually on average over the last decade to consistently above $10 billion since 2022.

Mary Barra: We haven't made excuses. We've just continued to perform. At the same time, our operating discipline has been a key driver of the structural improvement in our adjusted automotive free cash flow generation, which has improved from $3 to 5 billion annually on average over the last decade, to consistently above $10 billion since 2022.

Speaker #3: We built a strong EBIT foundation with new and redesigned vehicles like the Chevrolet Trucks, Equinox and Traverse. The revitalization of Buick. The success of sub-brands like the Denali and AT4, and Icons like the Chevrolet Corvette and the Cadillac Escalade.

Speaker #4: We expect these trends will continue to strengthen our performance into 2027 and beyond, because we have multiple engines of margin expansion and growth while maintaining our capital discipline.

Mary Barra: We expect these trends will continue to strengthen our performance into 2027 and beyond, because we have multiple engines of margin expansion and growth while maintaining our capital discipline. We built a strong EBIT foundation with new and redesigned vehicles like the Chevrolet Trax, Equinox, and Traverse, the revitalization of Buick, the success of sub-brands like the Denali and AT4, and icons like the Chevrolet Corvette and the Cadillac Escalade. For example, since 2020, we have increased the EBIT profitability per unit of our crossover portfolio by four times, while our full-size pickup and full-size SUV segments are each up over 25%. Our next major launch, the next generation Chevrolet Silverado and GMC Sierra light-duty pickups, will further separate us from key competitors when they begin arriving in showrooms in December. The truck will deliver improved ride quality, power, durability, and towing capability.

Speaker #3: For example, since 2020, we have increased the EBIT, profitability, per unit of our crossover portfolio by 4 times, while our full-size pickup and full-size SUV segments are each up over 25%.

Speaker #4: We built a strong EBIT foundation with new and redesigned vehicles like the Chevrolet trucks, Equinox, and Traverse; the revitalization of Buick; the success of sub-brands like Denali and AT4; and icons like the Chevrolet Corvette and the Cadillac Escalade.

Speaker #3: Our next major launch, the next generation Chevrolet Silverado and GMC Sierra light-duty pickups, will further separate us from key competitors when they begin arriving in showrooms in December.

Speaker #3: The truck will deliver improved ride quality, power, durability, and towing capability. We have also significantly elevated the exterior and interior design to increase their presence, refinement, and appeal.

Speaker #4: For example, since 2020, we have increased the EBIT profitability per unit of our crossover portfolio by four times, while our full-size pickup and full-size SUV segments are each up over 25%.

Mary Barra: For example, since 2020, we have increased the EBIT profitability per unit of our crossover portfolio by 4x, while our full-size pickup and full-size SUV segments are each up over 25%. Our next major launch, the next generation Chevrolet Silverado and GMC Sierra light-duty pickups, will further separate us from key competitors when they begin arriving in showrooms in December. The truck will deliver improved ride quality, power, durability, and towing capability.

Speaker #3: We plan to maintain record production volumes year over year while launching the trucks at 3 assembly plants, along with our next generation V8 engines, which are launching at 3 propulsion plants.

Speaker #4: Our next major launch, the next-generation Chevrolet Silverado and GMC Sierra light-duty pickups, will further separate us from key competitors when they begin arriving in showrooms in December.

Speaker #4: The truck will deliver improved ride quality, power, durability, and towing capability. We have also significantly elevated the exterior and interior design to increase their presence, refinement, and appeal.

Speaker #3: We are also increasing capacity for full-size SUVs. Starting next spring and continuing into 2028, we will begin launching the next generation of Cadillac ICE vehicles, including the all-new CT5, XG5, and XG6, which will complement the Escalade and the brand's luxury segment-leading EV portfolio, the Escalade IQ, Vistiq, Lyric, and Optic.

Mary Barra: We have also significantly elevated the exterior and interior design to increase their presence, refinement, and appeal. We plan to maintain record production volumes year-over-year while launching the trucks at 3 assembly plants, along with our next generation V8 engines, which are launching at 3 propulsion plants. We are also increasing capacity for full-size SUVs. Starting next spring and continuing into 2028, we will begin launching the next generation of Cadillac ICE vehicles, including the all-new CT5, XT5, and XT6, which will complement the Escalade and the brand's luxury segment-leading EV portfolio, the Escalade IQ, Vistiq, Lyriq, and Optiq. We are onshoring significant manufacturing starting next year, which will bring our US production capacity to more than 2 million units and further reduce our tariff exposure.

Speaker #4: We plan to maintain record production volumes year over year while launching the trucks at three assembly plants, along with our next-generation V8 engines, which are launching at three propulsion plants.

Speaker #3: And we are onshoring significant manufacturing starting next year, which will bring our U.S. production capacity to more than 2 million units and further reduce our tariff exposure.

Speaker #4: We are also increasing capacity for full-size SUVs. Starting next spring and continuing into 2028, we will begin launching the next generation of Cadillac ICE vehicles, including the all-new CT5, XG5, and XG6, which will complement the Escalade and the brand's luxury segment-leading EV portfolio: the Escalade IQ, Vistiq, Lyriq, and Optiq.

Mary Barra: Starting next spring and continuing into 2028, we will begin launching the next generation of Cadillac ICE vehicles, including the all-new CT5, XT5, and XT6, which will complement the Escalade and the brand's luxury segment-leading EV portfolio, the Escalade IQ, Vistiq, Lyriq, and Optiq. We are onshoring significant manufacturing starting next year, which will bring our US production capacity to more than 2 million units and further reduce our tariff exposure.

Speaker #3: At the same time, our high-margin software and services revenues continue to grow rapidly, with 1 million new subscriptions expected this year, contributing to more than 3 billion in recognized revenue.

Speaker #3: Next year, the growth should be even higher because we're making Super Cruise Standard and high-end Silverado and Sierra trims, and optional on most everything else.

Speaker #4: And we are onshoring significant manufacturing starting next year, which will bring our U.S. production capacity to more than 2 million units and further reduce our tariff exposure.

Speaker #3: We're estimating 160,000 incremental Super Cruise units from this product enhancement strategy. Alongside our core vehicle portfolio and software growth, new businesses initiatives like GM Insurance and GM Defense are reaching critical mass because we offer unique value propositions.

Speaker #4: At the same time, our high-margin software and services revenues continue to grow rapidly, with 1 million new subscriptions expected this year, contributing to more than $3 billion in recognized revenue.

Mary Barra: At the same time, our high-margin software and services revenues continue to grow rapidly, with 1 million new subscriptions expected this year, contributing to more than $3 billion in recognized revenue. Next year, the growth should be even higher because we're making Super Cruise standard on high-end Silverado and Sierra trims, and optional on most everything else. We're estimating 160,000 incremental Super Cruise units from this product enhancement strategy. Alongside our core vehicle portfolio and software growth, new businesses initiatives like GM Insurance and GM Defense are reaching critical mass because we offer unique value propositions. For example, when a customer purchases GM Insurance, we create a recurring revenue stream from premiums, along with incremental parts and vehicle sales, all while driving customer loyalty and higher satisfaction.

Speaker #4: Next year, the growth should be even higher because we're making Super Cruise standard on high-end Silverado and Sierra trims and optional on most everything else.

Speaker #3: For example, when a customer purchases GM Insurance, we create a reoccurring revenue stream from premiums, along with incremental parts and vehicle sales, all while driving customer loyalty and higher satisfaction.

Speaker #4: We're estimating 160,000 incremental Super Cruise units from this product enhancement strategy. Alongside our core vehicle portfolio and software growth, new business initiatives like GM Insurance and GM Defense are reaching critical mass because we offer unique value propositions.

Speaker #3: The business has scaled from 3 states in early 2024 to 21 states today, making GM Insurance available to over 60% of GM's U.S. sales and we are on track to reach over 80% in the near term.

Speaker #4: For example, when a customer purchases GM Insurance, we create a recurring revenue stream from premiums, along with incremental parts and vehicle sales, all while driving customer loyalty and higher satisfaction.

Speaker #3: GM Defense is another compelling growth opportunity that enables us to deliver defense solutions faster, with better economics for the U.S. taxpayer. The Chevrolet Colorado-based inventory squad vehicle is case in point.

Speaker #4: The business has scaled from three states in early 2024 to 21 states today, making GM Insurance available to over 60% of GM's U.S. sales, and we are on track to reach over 80% in the near term.

Mary Barra: The business has scaled from 3 states in early 2024 to 21 states today, making GM Insurance available to over 60% of GM's US sales, and we are on track to reach over 80% in the near term. GM Defense is another compelling growth opportunity that enables us to deliver defense solutions faster with better economics for the US taxpayer. The Chevrolet Colorado-based Infantry Squad Vehicle is case in point. After initial multi-year order of about 1,200 ISVs, the US Army now plans to procure more than 10,000 if the appropriations is passed. We're building momentum with other products and customers, including the US Department of State and Secret Service, as well as Canada, Qatar, Brazil, and other allies. We're also supplying battery propulsion technology to Lunar Outpost, which has been awarded $220 million NASA contract to build the next generation lunar terrain vehicle.

Speaker #3: After our ur initial multi-year order of about 1,200 ISVs, the U.S. Army now plans to procure more than 10,000 if the appropriations is passed.

Speaker #3: We're building momentum with other products and customers, including the U.S. State Department and Secret Service, as well as Canada, Qatar, Brazil, and other allies.

Speaker #4: GM Defense is another compelling growth opportunity that enables us to deliver defense solutions faster, with better economics for the U.S. taxpayer. The Chevrolet Colorado-based Infantry Squad Vehicle is case in point.

Speaker #3: And we're also supplying battery propulsion technology to lunar outposts, which has been awarded 220 million dollar generation lunar terrain vehicle. GM Defense expects 2026 revenue to grow to almost 700 million, and is targeting positive results on an EBIT basis for this year, while also building a backlog of future business.

Speaker #4: After our initial multi-year order of about 1,200 ISVs, the U.S. Army now plans to procure more than 10,000 if the appropriations is passed. We're building momentum with other products and customers, including the U.S.

Speaker #4: State Department and Secret Service, as well as Canada, Qatar, Brazil, and other allies. And we're also supplying battery propulsion technology to lunar outposts, which has been awarded a $220 million NASA contract to build the next generation lunar terrain vehicle.

Speaker #3: We are expecting a top-line revenue cater for GM Defense of more than 30% over the next several years, with double-digit margins. This includes ISV awards that are expected to exceed 1 billion dollars based on the U.S.

Speaker #3: Army's procurement objectives. We are also working with Lockheed Martin and other leading companies to expand speed, scale, and resilience in the defense industrial base.

Speaker #4: GM Defense expects 2026 revenue to grow to almost $700 million and is targeting positive results on an EBIT basis for this year, while also building a backlog of future business.

Mary Barra: GM Defense expects 2026 revenue to grow to almost $700 million and is targeting positive results on an EBIT basis for this year, while also building a backlog of future business. We are expecting a top-line revenue CAGR for GM Defense of more than 30% over the next several years with double-digit margins. This includes ISV awards that are expected to exceed $1 billion based on the US Army's procurement objectives. We are also working with Lockheed Martin and other leading companies to expand speed, scale, and resilience in the defense industrial base. We're focusing our efforts on strengthening supply chain management, improving manufacturing readiness, and expanding production capacity in ways that serve the United States and its allies well. Over time, all of this should make GM Defense a more meaningful and diversified contributor to our earnings. With that, I'll turn it over to Paul.

Speaker #3: We're focusing our efforts on strengthening supply chain management, improving manufacturing readiness, and expanding production capacity in ways that serve the United States and its allies well.

Speaker #4: We are expecting a top-line revenue CAGR for GM Defense of more than 30% over the next several years, with double-digit margins. This includes ISV awards that are expected to exceed $1 billion based on the U.S.

Speaker #3: Over time, all of this should make GM Defense a more meaningful and diversified contributor to our earnings. With that, I'll turn it over to Paul.

Speaker #4: Army's procurement objectives. We are also working with Lockheed Martin and other leading companies to expand speed, scale, and resilience in the defense industrial base.

Speaker #2: Thank you, Mary, and I appreciate everyone joining us this morning. I also want to begin by recognizing the entire GM team, whose hard work and consistent execution quarter after quarter underpinned the solid results we're reporting today.

Speaker #4: We're focusing our efforts on strengthening supply chain management, improving manufacturing readiness, and expanding production capacity in ways that serve the United States and its allies well.

Speaker #2: In the first half of the year, we generated 92 billion dollars in revenue and 8.2 billion dollars of EBIT adjusted. EPS diluted adjusted increased more than 35% year over year to $7.27 a share.

Speaker #4: Over time, all of this should make GM Defense a more meaningful and diversified contributor to our earnings. With that, I'll turn it over to Paul.

Speaker #1: Thank you, Mary, and I appreciate everyone joining us this morning. I also want to begin by recognizing the entire GM team, whose hard work and consistent execution, quarter after quarter, underpin the solid results we're reporting today.

Paul Jacobson: Thank you, Mary, and appreciate everyone joining us this morning. I also want to begin by recognizing the entire GM team, whose hard work and consistent execution quarter after quarter underpin the solid results we are reporting today. In the H1 of the year, we generated $92 billion in revenue and $8.2 billion of EBIT adjusted. EPS diluted adjusted increased more than 35% year over year to $7.27 a share. This was our best H1 EPS diluted adjusted performance ever, more than 25% above the prior high. Put simply, in just six months, we delivered an EPS result that was better than six of our last 10 full years. A clear reflection of how GM has transformed itself over the past decade by strengthening our product portfolio to drive revenue growth, improving core operating performance, lowering costs, and materially reducing our share count through significant share repurchases.

Speaker #2: This was our best first-half EPS diluted adjusted performance ever, more than 25% above the prior high. Put simply, in just 6 months, we delivered an EPS result that was better than 6 of our last 10 full years.

Speaker #1: In the first half of the year, we generated 92 billion dollars in revenue and 8.2 billion dollars of EBIT adjusted. EPS diluted adjusted increased more than 35% year over year to $7.27 a share.

Speaker #2: A clear reflection of how GM has transformed itself over the past decade by strengthening our product portfolio to drive revenue growth, improving core operating performance, lowering costs, and materially reducing our share count through significant share repurchases.

Speaker #1: This was our best first-half EPS diluted-adjusted performance ever—more than 25% above the prior high. Put simply, in just six months, we delivered an EPS result that was better than six of our last ten full years.

Speaker #2: We also maintained our pricing discipline, with incentives as a percentage of MSRP running 1.5 to 2 points below the industry average, helping to improve total company margin by 1.8 points year over year in the first half alone.

Speaker #1: This is a clear reflection of how GM has transformed itself over the past decade by strengthening our product portfolio to drive revenue growth, improving core operating performance, lowering costs, and materially reducing our share count through significant share repurchases.

Speaker #2: In strong, with our best first half in more than 5 years, including our highest government sales since 2009 and record full-size pickup sales driven by strong commercial demand.

Speaker #1: We also maintained our pricing discipline, with incentives as a percentage of MSRP running 1.5 to 2 points below the industry average. This helped to improve total company margin by 1.8 points year over year in the first half alone.

Paul Jacobson: We also maintained our pricing discipline with incentives as a percentage of MSRP running one and a half to two points below the industry average, helping to improve total company margin by 1.8 points year over year in the H1 alone. In addition, fleet sales have been strong, with our best H1 in more than five years, including our highest government sales since 2009 and record full-size pickup sales driven by strong commercial demand. Importantly, the growth in fleet comes without diluting margin. Year over year, our market share was down by about 60 basis points versus the H1 of 2025, largely reflecting three factors. One, strategic decisions to discontinue certain vehicles in our portfolio, including the Chevrolet Malibu and the Cadillac XT4. Two, a smaller EV market following reductions in consumer incentives.

Speaker #2: Importantly, the growth in fleet comes without diluting margin. Year over year, our market share was down by about 60 basis points versus the first half of 2025, largely reflecting three factors: (1) strategic decisions to discontinue certain vehicles in our portfolio, including the Chevrolet Malibu and the Cadillac XT4; (2) a smaller EV market following reductions in consumer incentives; and (3) tight dealer inventory early in the year, which was at a low point in January and February.

Speaker #1: In addition, fleet sales have been strong, with our best first half in more than five years, including our highest government sales since 2009 and record full-size pickup sales driven by strong commercial demand.

Speaker #1: Importantly, the growth in fleet comes without diluting margin. Year over year, our market share was down by about 60 basis points versus the first half of 2025, largely reflecting three factors.

Speaker #2: But as Mary mentioned, the investments we are making to onshore production, launch key vehicles, and expand full-size SUV capacity will give us more flexibility and position us to grow revenue, gain market share, and improve profitability in 2027.

Speaker #1: One, strategic decisions to discontinue certain vehicles in our portfolio, including the Chevrolet Malibu and the Cadillac XT4. Two, a smaller EV market following reductions in consumer incentives.

Speaker #2: On capital allocation, our strong first-half adjusted automotive free cash flow of $6.3 billion allowed us to continue executing against our share buyback program. In the second quarter, we made $2 billion in open market share repurchases, retiring approximately 25 million shares, which brings our first half total to $2.8 billion repurchased and $36 million shares retired.

Speaker #1: And three, tight dealer inventory early in the year, which was at a low point in January and February. But as Mary mentioned, the investments we are making to onshore production launch key vehicles and expand full-size SUV capacity, will give us more flexibility and position us to grow revenue, gain market share, and improve profitability in 2027.

Paul Jacobson: Three, tight dealer inventory early in the year, which was at a low point in January and February. But as Mary mentioned, the investments we are making to onshore production, launch key vehicles, and expand full-size SUV capacity will give us more flexibility and position us to grow revenue, gain market share, and improve profitability in 2027. On capital allocation, our strong H1-adjusted automotive free cash flow of $6.3 billion allowed us to continue executing against our share buyback program. In the Q2, we made $2 billion in open market share repurchases, retiring approximately 25 million shares, which brings our H1 total to $2.8 billion repurchased and 36 million shares retired. This is nearly $1 billion more than the H1 of last year, despite our EV restructuring efforts.

Speaker #2: This is nearly 1 billion dollars more than the first half of last year, despite our EV restructuring efforts. We ended the second quarter with a diluted share count of 893 million, approximately 8% below where we ended the second quarter of 2025, and 35% below the second quarter of 2023.

Speaker #1: On capital allocation, our strong first-half adjusted automotive free cash flow of $6.3 billion allowed us to continue executing against our share buyback program.

Speaker #1: In the second quarter, we made $2 billion in open market share repurchases, retiring approximately 25 million shares. This brings our first half total to $2.8 billion repurchased and 36 million shares retired.

Speaker #2: We have 3.5 billion dollars remaining under our current repurchase authorization, and expect to continue to consistently repurchase shares, supported by strong cash flow and our ending Q2 automotive cash balance of 19.7 billion dollars.

Speaker #1: This is nearly 1 billion dollars more than the first half of last year, despite our EV restructuring efforts. We ended the second quarter with a diluted share count of 893 million, approximately 8% below where we ended the second quarter of 2025, and 35% below the second quarter of 2023.

Paul Jacobson: We ended the Q2 with a diluted share count of 893 million, approximately 8% below where we ended the Q2 of 2025 and 35% below the Q2 of 2023. We have $3.5 billion remaining under our current repurchase authorization and expect to continue to consistently repurchase shares, supported by strong cash flow and our ending Q2 automotive cash balance of $19.7 billion. Now let's turn to the Q2 financial results in more detail. Total company revenue of $48 billion was up $900 million year over year, driven by higher wholesale volumes, reflecting higher ICE volumes in both North America and South America, partially offset by lower EV volumes. EBIT adjusted of $3.9 billion was up $900 million year over year. The improvement was driven primarily by core business performance, supported by stronger pricing and lower costs, including EV warranty and emissions-related regulatory tailwinds.

Speaker #2: Now let's turn to the second quarter financial results in more detail. Total company revenue of $48 billion was up 900 million dollars year over year, driven by higher wholesale volumes, reflecting higher ICE volumes in both North America and South America, partially offset by lower EV volumes.

Speaker #1: We have $3.5 billion remaining under our current repurchase authorization and expect to continue to consistently repurchase shares, supported by strong cash flow and our ending Q2 automotive cash balance of $19.7 billion.

Speaker #2: EBIT adjusted of 3.9 billion dollars was up 900 million dollars year over year. The improvement was driven primarily by core business performance, supported by stronger pricing and lower costs, including EV, warranty, and emissions-related regulatory tailwinds.

Speaker #1: Now let's turn to the second quarter financial results in more detail. Total company revenue of $48 billion was up $900 million year over year, driven by higher wholesale volumes, reflecting higher ICE volumes in both North America and South America, partially offset by lower EV volumes.

Speaker #2: Adjusted automotive free cash flow of $5 billion was up 2.2 billion dollars year over year. The improvement was driven by higher earnings and timing of both tariff reimbursements and CapEx spending.

Speaker #1: EBIT adjusted of $3.9 billion was up $900 million year over year. The improvement was driven primarily by core business performance, supported by stronger pricing and lower costs, including EV warranty and emissions-related regulatory tailwinds.

Speaker #2: Let me now update you on our EV-related restructuring. In the second quarter, we recorded 2.3 billion dollars in incremental charges. Of that amount, 900 million dollars was supplier-related cash charges, 700 million dollars in cash charges to right-size the battery supply chain with our joint venture partners, and 700 million dollars were non-cash write-offs for compliance-related and other asset impairments.

Speaker #1: Adjusted automotive free cash flow of $5 billion was up $2.2 billion year over year. The improvement was driven by higher earnings and the timing of both tariff reimbursements and CapEx spending.

Paul Jacobson: Adjusted automotive free cash flow of $5 billion was up $2.2 billion year over year. The improvement was driven by higher earnings and timing of both tariff reimbursements and CapEx spending. Let me now update you on our EV-related restructuring. In the Q2, we recorded $2.3 billion in incremental charges. Of that amount, $900 million was supplier-related cash charges, $700 million in cash charges to right-size the battery supply chain with our joint venture partners, and $700 million were non-cash write-offs for compliance related and other asset impairments. In total, we have recorded $10.9 billion of EV-related charges since the H2 2025, of which approximately $7.2 billion will have a cash impact. Through the end of the Q2, we paid $4.5 billion of this amount. Our teams have worked tirelessly with our partners and suppliers across the EV value chain to conclude these negotiations quickly.

Speaker #1: Let me now update you on our EV-related restructuring. In the second quarter, we recorded $2.3 billion in incremental charges. Of that amount, $900 million was supplier-related cash charges, $700 million in cash charges to right-size the battery supply chain with our joint venture partners, and $700 million were non-cash write-offs for compliance-related and other asset impairments.

Speaker #2: In total, we have recorded 10.9 billion dollars of EV-related charges since the second half of 2025, of which approximately 7.2 billion dollars will have a cash impact.

Speaker #2: Through the end of the second quarter, we paid $4.5 billion of this amount. Our teams have worked tirelessly with our partners and suppliers across the EV value chain to conclude these negotiations quickly.

Speaker #2: I'm proud to say that we believe these actions substantially complete the material cash charges we expect to incur as we align our EV capacity and manufacturing footprint with the changes in regulatory policy.

Speaker #1: In total, we have recorded $10.9 billion of EV-related charges since the second half of 2025, of which approximately $7.2 billion will have a cash impact.

Speaker #2: While circumstances may change in the future, and we may have some true-ups, it's important to get this work behind us. Now let's move to our second quarter regional results.

Speaker #1: Through the end of the second quarter, we paid $4.5 billion of this amount. Our teams have worked tirelessly with our partners and suppliers across the EV value chain to conclude these negotiations quickly.

Speaker #2: North America delivered EBIT adjusted of 3.4 billion dollars, up a billion or over 40% year over year. Margin was 8.6%, and improvement of 2.5 points from a year ago when tariffs were first put into place.

Speaker #1: I'm proud to say that we believe these actions substantially complete the material cash charges we expect to incur as we align our EV capacity and manufacturing footprint with the changes in regulatory policy.

Paul Jacobson: I'm proud to say that we believe these actions substantially complete the material cash charges we expect to incur as we align our EV capacity and manufacturing footprint with the changes in regulatory policy. While circumstances may change in the future, and we may have some true-ups, it's important to get this work behind us. Now let's move to our Q2 regional results. North America delivered EBIT adjusted of $3.4 billion, up $1 billion or over 40% year over year. Margin was 8.6%, an improvement of 2 and a half points from a year ago when tariffs were first put into place. Having worked through much of that pressure, we are solidly back within our 8% to 10% margin target, a clear marker of the progress this team has made.

Speaker #2: Having worked through much of that pressure, we are solidly back within our 8 to 10% margin target, a clear marker of the progress this team has made.

Speaker #1: While circumstances may change in the future, and we may have some true-ups, it's important to get this work behind us. Now, let's move to our second quarter regional results.

Speaker #2: The improvement was broad-based, driven by strong pricing, lower EV losses from right-sizing our capacity, along with continued warranty and emissions-related regulatory tailwinds. These gains were partially offset by commodity inflation, including logistics and higher DRAM costs, along with manufacturing costs related to onshoring production to the U.S.

Speaker #1: North America delivered EBIT adjusted of 3.4 billion dollars, up a billion or over 40% year over year. Margin was 8.6%, and improvement of 2.5 points from a year ago when tariffs were first put into place.

Speaker #1: Having worked through much of that pressure, we are solidly back within our 8% to 10% margin target—a clear marker of the progress this team has made.

Speaker #2: Total U.S. dealer inventory ended the quarter at $511,000 units or approximately 55 days of supply. This is right in the middle of our targeted range of 50 to 60 days.

Speaker #1: The improvement was broad-based, driven by strong pricing; lower EV losses from right-sizing our capacity; and continued warranty and emissions-related regulatory tailwinds. These gains were partially offset by commodity inflation, including logistics and higher DRAM costs, along with manufacturing costs related to onshoring production to the U.S.

Paul Jacobson: The improvement was broad-based, driven by strong pricing, lower EV losses from right-sizing our capacity, along with continued warranty and emissions-related regulatory tailwinds. These gains were partially offset by commodity inflation, including logistics and higher DRAM costs, along with manufacturing costs related to onshoring production to the US. Total US dealer inventory ended the quarter at 511,000 units, or approximately 55 days of supply. This is right in the middle of our targeted range of 50 to 60 days. GM International, excluding China equity income, delivered EBIT adjusted of $100 million, driven by strong execution across most of the regions. While Middle East wholesales were significantly impacted by shipping disruptions, strong sales performance in South America partially offset this headwind. China equity income was $100 million. The team deserves a lot of credit for the restructuring work they did to enable us to be profitable despite the very difficult environment.

Speaker #2: income delivered EBIT adjusted of $100 million driven by strong execution across most of the regions. While Middle East wholesales were significantly impacted by shipping disruptions, strong sales performance in South America partially offset this headwind.

Speaker #1: Total U.S. dealer inventory ended the quarter at 511,000 units, or approximately 55 days of supply. This is right in the middle of our targeted range of 50 to 60 days.

Speaker #2: China equity income was $100 million; the team deserves a lot of credit for the restructuring work they did to enable us to be profitable despite the very difficult environment.

Speaker #1: GM International, excluding China equity income, delivered EBIT-adjusted of $100 million, driven by strong execution across most of the regions. While Middle East wholesales were significantly impacted by shipping disruptions, strong sales performance in South America partially offset this headwind.

Speaker #2: We remain focused on execution, cost efficiencies, and mix optimization to deliver ongoing profitability. GM Financial delivered EBIT adjusted of $600 million and paid $250 million in dividends to GM in the quarter, reinforcing our strategic value within the enterprise.

Speaker #1: China equity income was $100 million. The team deserves a lot of credit for the restructuring work they did to enable us to be profitable despite the very difficult environment.

Speaker #2: Since 2019, GMF has grown its balance sheet by more than 25%, while outperforming other captive finance companies on profitability and growth. This performance reflects disciplined execution and the ability to generate consistent, risk-appropriate returns, and is further supported by GM Financial maintaining its leadership position in manufacturer loyalty for 10 consecutive years.

Speaker #1: We remain focused on execution, cost efficiencies, and mixed optimization to deliver ongoing profitability. GM Financial delivered EBIT adjusted of 600 million dollars and paid 250 million dollars in dividends to GM in the quarter, reinforcing our strategic value within the enterprise.

Paul Jacobson: We remain focused on execution, cost efficiencies, and mix optimization to deliver ongoing profitability. GM Financial delivered EBT adjusted of $600 million and paid $250 million in dividends to GM in the quarter, reinforcing our strategic value within the enterprise. Since 2019, GMF has grown its balance sheet by more than 25% while outperforming other captive finance companies on profitability and growth. This performance reflects disciplined execution and the ability to generate consistent risk-appropriate returns and is further supported by GM Financial maintaining its leadership position in manufacturer loyalty for 10 consecutive years. The business remains within its full year EBT adjusted guidance of $2.5 to $3 billion and is on track to pay full-year dividends to GM similar to last year.

Speaker #1: Since 2019, GMF has grown its balance sheet by more than 25%, while outperforming other captive finance companies in profitability and growth. This performance reflects disciplined execution and the ability to generate consistent, risk-appropriate returns, and is further supported by GM Financial maintaining its leadership position in manufacturer loyalty for 10 consecutive years.

Speaker #2: The business remains within its full-year EBIT adjusted guidance of 2.5 to 3 billion dollars and is on track to pay full-year dividends to GM similar to last year.

Speaker #2: Based on our strong operating performance, including improved pricing and warranty assumptions, as well as a slightly better commodity outlook, we are raising our full-year guidance across all of our key metrics.

Speaker #2: We now expect EBIT adjusted of 14 to 16 billion dollars, up from 13.5 to 15.5 billion. EPS diluted adjusted of 12 to 14 dollars, up from 11.5 to 13.5 per share.

Speaker #1: The business remains within its full-year EBIT-adjusted guidance of $2.5 to $3 billion, and is on track to pay full-year dividends to GM similar to last year.

Speaker #1: Based on our strong operating performance, including improved pricing and warranty assumptions, as well as a slightly better commodity outlook, we are raising our full-year guidance across all of our key metrics.

Paul Jacobson: Based on our strong operating performance, including improved pricing and warranty assumptions, as well as a slightly better commodity outlook, we are raising our full-year guidance across all of our key metrics. We now expect EBIT adjusted of $14 to $16 billion, up from $13.5 to $15.5 billion. EPS diluted adjusted of $12 to $14, up from $11.50 to $13.50 per share, and adjusted automotive free cash flow of $9.5 to $11.5 billion, up from $9 to $11 billion previously. Before I address the key assumptions underlying our updated full-year guidance, I want to note that it assumes no material escalation in the Middle East and no significant increase in commodity or other inflationary pressures from current levels. Starting with the industry backdrop, we continue to assume US total SAAR in the low 16-million-unit range for the full year, consistent with where it is run year to date.

Speaker #2: And adjusted automotive free cash flow of 9.5 to 11.5 billion dollars, up from 9 to 11 billion previously. Before I address the key assumptions underlying our updated full-year guidance, I want to note that it assumes no material escalation in the Middle East and no significant increase in commodity or other inflationary pressures from current levels.

Speaker #1: We now expect adjusted EBIT of $14 to $16 billion, up from $13.5 to $15.5 billion. Adjusted diluted EPS of $12 to $14, up from $11.50 to $13.50 per share.

Speaker #2: Starting with the industry backdrop, we continue to assume U.S. total SAR and the low 16 million unit range for the full year, consistent with where it has run year to date.

Speaker #1: And adjusted automotive free cash flow of $9.5 to $11.5 billion, up from $9 to $11 billion previously. Before I address the key assumptions underlying our updated full-year guidance, I want to note that it assumes no material escalation in the Middle East and no significant increase in commodity or other inflationary pressures from current levels.

Speaker #2: North America ice wholesales were up approximately 1% in the first half, and we expect second half year over year volumes to be up in a similar range.

Speaker #2: We continue to be constrained by full-size truck production including the impact of the new truck launch and the planned discontinuation of certain vehicles we referenced earlier.

Speaker #1: Starting with the industry backdrop, we continue to assume U.S. total SAR in the low 16 million unit range for the full year, consistent with where it has run year to date.

Speaker #2: Turning to EVs, we continue to expect losses to improve by 1 to 1.5 billion dollars for the full year driven by right-sizing our EV capacity and significantly lower volume.

Speaker #1: North America ice wholesales were up approximately 1% in the first half, and we expect second half year over year volumes to be up in a similar range.

Paul Jacobson: North America ICE wholesales were up approximately 1% in the H1. We expect H2 year-over-year volumes to be up in a similar range. We continue to be constrained by full-size truck production, including the impact of the new truck launch and the planned discontinuation of certain vehicles we referenced earlier. Turning to EVs, we continue to expect losses to improve by $1 to $1.5 billion for the full year, driven by right-sizing our EV capacity and significantly lower volume. In the H1, we realized approximately $500 million of this benefit. We expect EV wholesale volumes to be up slightly in the H2 as we resume building to demand. Warranty is tracking to a $1 to $1.5 billion improvement year-over-year for the full year, above our previous assumption of up $1 billion.

Speaker #2: In the first half, we realized approximately 500 million dollars of this benefit. We expect EV wholesale volumes to be up slightly in the second half as we resume building to demand.

Speaker #1: We continue to be constrained by full-size truck production, including the impact of the new truck launch and the planned discontinuation of certain vehicles we referenced earlier.

Speaker #2: Warranty is tracking to a 1 to 1.5 billion dollar improvement year over year for the full year, above our previous assumption of up a billion.

Speaker #1: Turning to EVs, we continue to expect losses to improve by 1 to 1.5 billion dollars for the full year, driven by right-sizing our EV capacity and significantly lower volume.

Speaker #2: We realized 500 million dollars in the first half and expect most of the remaining benefit flow through in the third quarter. Emissions-related regulatory savings remain on track as well.

Speaker #1: In the first half, we realized approximately 500 million dollars of this benefit. We expect EV wholesale volumes to be up slightly in the second half, as we resume building to demand.

Speaker #2: We continue to expect a full-year benefit of 500 to 750 million dollars, primarily from lower regulatory credit amortization. We recognize approximately 400 million dollars in the first half and expect a smaller benefit in the second half as we begin to lap the savings that started in the second half of 2025.

Speaker #1: Warranty is tracking to a $1 to $1.5 billion improvement year over year for the full year, above our previous assumption of up $1 billion.

Speaker #1: We realized 500 million dollars in the first half and expect most of the remaining benefit flow through in the third quarter. Emissions-related regulatory savings remain on track as well.

Paul Jacobson: We realized $500 million in the H1. We expect most of the remaining benefit flow through in the Q3. Emissions-related regulatory savings remain on track as well. We continue to expect a full-year benefit of $500 to $750 million, primarily from lower regulatory credit amortization. We recognized approximately $400 million in the H1 and expect a smaller benefit in the H2 as we begin to lap the savings that started in the H2 of 2025. On pricing, we recognized a $600 million year-over-year benefit in the H1. We now expect full-year North America pricing to be up around 0.5%, which is at the high end of our prior guidance. The pricing benefit is expected to be smaller in the H2 as we lap last year's 2026 model year price increases.

Speaker #2: On pricing, we recognized a 600 million dollar year over year benefit in the first half and now expect full-year North America pricing to be up around half a percent, which is at the high end of our prior guidance.

Speaker #1: We continue to expect a full-year benefit of $500 to $750 million, primarily from lower regulatory credit amortization. We recognized approximately $400 million in the first half and expect a smaller benefit in the second half as we begin to lap the savings that started in the second half of 2025.

Speaker #2: The pricing benefit is expected to be smaller in the second half as we lap last year's 2026 model year price increases. We continue to expect gross tariff costs of 2.5 to 3.5 billion dollars for the full year, which is largely flat year over year.

Speaker #1: On pricing, we recognized a $600 million year-over-year benefit in the first half and now expect full-year North America pricing to be up around half a percent, which is at the high end of our prior guidance.

Speaker #2: Through the first half, we incurred approximately 1.3 billion dollars net of the 500 million dollar AIPA benefit recognized in the first quarter. We expect the gross tariff impact in each of the third and fourth quarters to be similar to the impact of the second, which was around 900 million dollars.

Speaker #1: The pricing benefit is expected to be smaller in the second half as we lap last year's 2026 model year price increases. We continue to expect gross tariff costs of $2.5 to $3.5 billion for the full year, which is largely flat year over year.

Paul Jacobson: We continue to expect gross tariff costs of $2.5 to $3.5 billion for the full year, which is largely flat year-over-year. Through the H1, we incurred approximately $1.3 billion net of the $500 million IEPA benefit recognized in the Q1. We expect the gross tariff impact in each of the Q3 and Q4 to be similar to the impact of the Q2, which was around $900 million. Let's now turn to the headwinds. We continue to expect commodity inflation, logistics, and higher DRAM costs to be a headwind of $1.5 to $2 billion for the full year. We realized approximately $600 million in commodity costs in the H1. We expect that headwind to increase in the H2, largely because it reflects two quarters of higher costs rather than just one.

Speaker #2: Let's now turn to the headwinds. We continue to expect commodity inflation, logistics, and higher DRAM costs to be a headwind of 1.5 to 2 billion dollars for the full year.

Speaker #1: Through the first half, we incurred approximately $1.3 billion, net of the $500 million IEPA benefit recognized in the first quarter. We expect the gross tariff impact in each of the third and fourth quarters to be similar to the impact in the second, which was around $900 million.

Speaker #2: We realized approximately 600 million dollars in commodity costs in the first half and expect that headwind to increase in the second half, largely because it reflects two quarters of higher costs rather than just one.

Speaker #2: In addition, spot rates continue to rise after our first quarter earnings call, and while they have eased somewhat recently, several commodities remain above those these costs flow through our results, the recent improvement should begin to benefit us in the fourth quarter and into early 2027.

Speaker #1: Let's now turn to the headwinds. We continue to expect commodity inflation, logistics, and higher DRAM costs to be a headwind of $1.5 to $2 billion for the full year.

Speaker #1: We realized approximately $600 million in commodity costs in the first half and expect that headwind to increase in the second half, largely because it reflects two quarters of higher costs rather than just one.

Speaker #2: On DRAM specifically, our expanded collaboration with Micron strengthens access to critical memory technologies and deepens integration across our vehicle platforms, reinforcing supply availability for the long term.

Speaker #1: In addition, spot rates continued to rise after our first-quarter earnings call, and while they have eased somewhat recently, several commodities remain above those levels.

Paul Jacobson: In addition, spot rates continued to rise after our Q1 earnings call, and while they have eased somewhat recently, several commodities remain above those levels. Also, given the lag in how these costs flow through our results, the recent improvements should begin to benefit us in the Q4 and into early 2027. On DRAM specifically, our expanded collaboration with Micron strengthens access to critical memory technologies and deepens integration across our vehicle platforms, reinforcing supply availability for the long term. Separately, we are also investing approximately $1 to $1.5 billion this year to onshore production to the US, strengthen our supply chain, and expand our software capabilities. We incurred approximately $400 million in H1, and we expect these costs to ramp further in H2 as we approach production in 2027. Finally, turning to our international operations.

Speaker #2: Separately, we're also investing approximately 1 to 1.5 billion dollars this year to onshore production to the U.S., strengthen our supply chain, and expand our software capabilities.

Speaker #1: Also, given the lag in how these costs flow through our results, the recent improvement should begin to benefit us in the fourth quarter and into early 2027.

Speaker #2: We incurred approximately 400 million dollars in the first half, and we expect these costs to ramp further in the second half as we approach production in 2027.

Speaker #1: On DRAM specifically, our expanded collaboration with Micron strengthens access to critical memory technologies and deepens integration across our vehicle platforms, reinforcing supply availability for the long term.

Speaker #2: Finally, turning to our international operations, we continue to expect some softness in GM International ex-China, reflecting the dynamic environment in the Middle East. From a cadence perspective, we expect the fourth quarter to be somewhat weaker than typical seasonal patterns would imply, primarily due to the launch of our new full-size trucks.

Speaker #1: Separately, we're also investing approximately 1 to 1.5 billion dollars this year to onshore production to the U.S., strengthen our supply chain, and expand our software capabilities.

Speaker #1: We incurred approximately $400 million in the first half, and we expect these costs to ramp further in the second half as we approach production in 2027.

Speaker #2: Including higher launch-related costs and anticipated year-over-year volume headwind of approximately 35,000 units. We also expect onshoring costs to build as the year progresses, with the fourth quarter having the largest impact as we prepare to transfer escalate production to Orion Assembly.

Speaker #1: Finally, turning to our international operations, we continue to expect some softness in GM International ex-China, reflecting the dynamic environment in the Middle East. From a cadence perspective, we expect the fourth quarter to be somewhat weaker than typical seasonal patterns would imply, primarily due to the launch of our new full-size trucks.

Paul Jacobson: We continue to expect some softness in GM International ex China, reflecting the dynamic environment in the Middle East. From a cadence perspective, we expect the Q4 to be somewhat weaker than typical seasonal patterns would imply, primarily due to the launch of our new full-size trucks, including higher launch-related costs and anticipated year-over-year volume headwind of approximately 35,000 units. We also expect onshoring costs to build as the year progresses, with the Q4 having the largest impact as we prepare to transfer Escalade production to Orion Assembly. Before I close, I want to take a moment to underscore the strength of our core business. In North America, margins have returned to our 8% to 10% target range, and we are winning in the segments that matter most, including full-size trucks and SUVs, while maintaining disciplined pricing and inventory levels.

Speaker #2: Before I close, I want to take a moment to underscore the strength of our core business. In North America, margins of return to our 8 to 10 percent target range and we are winning in the segments that matter most, including full-size trucks and SUVs, while maintaining disciplined pricing and inventory levels.

Speaker #1: Including higher launch-related costs and an anticipated year-over-year volume headwind of approximately 35,000 units. We also expect onshoring costs to build as the year progresses, with the fourth quarter having the largest impact as we prepare to transfer Escalade production to Orion Assembly.

Speaker #2: That strength provides the foundation for everything else we are building. Our on-star digital business, including Super Cruise, remains a growing, margin-accretive asset. Subscriber growth drove deferred revenue to 6.3 billion dollars, up almost 50 percent from a year ago, while second quarter recognized revenue was 800 million, up 20 percent year over year, and well on pace to hit our full-year growth target of 400 million dollars.

Speaker #1: Before I close, I want to take a moment to underscore the strength of our core business. In North America, margins have returned to our 8% to 10% target range, and we are winning in the segments that matter most, including full-size trucks and SUVs, while maintaining disciplined pricing and inventory levels.

Speaker #1: That strength provides the foundation for everything else we are building. Our OnStar digital business, including Super Cruise, remains a growing, margin-accretive asset. Subscriber growth drove deferred revenue to $6.3 billion, up almost 50 percent from a year ago, while second-quarter recognized revenue was $800 million, up 20 percent year over year, and well on pace to hit our full-year growth target of $400 million.

Paul Jacobson: That strength provides the foundation for everything else we are building. Our OnStar digital business, including Super Cruise, remains a growing margin accretive asset. Subscriber growth drove deferred revenue to $6.3 billion, up almost 50% from a year ago, while Q2 recognized revenue was $800 million, up 20% year over year and well on pace to hit our full-year growth target of $400 million. This momentum carries into 2027, where amortization of our existing deferred and subscriber growth is expected to drive double-digit growth in realized revenue, building on our estimated full-year 2026 realized revenue of more than $3 billion. We are also building a select number of adjacent higher margin businesses, including GM Defense and GM Insurance, in a capital efficient manner that leverages our capabilities.

Speaker #2: This momentum carries into 2027, where amortization of our existing deferred and subscriber growth is expected to drive double-digit growth and realized revenue, building on our estimated full-year 2026 realized revenue of more than 3 billion dollars.

Speaker #2: We are also building a select number of adjacent higher-margin businesses, including GM Defense and GM Insurance, in a capital-efficient manner that leverages our capabilities.

Speaker #1: This momentum carries into 2027, where amortization of our existing deferred revenue and subscriber growth is expected to drive double-digit growth in realized revenue, building on our estimated full-year 2026 realized revenue of more than $3 billion.

Speaker #2: These businesses are modest contributors today, but we are optimistic about the long-term opportunities they present and will continue to share progress as they scale.

Speaker #2: While our primary focus is to deliver on our 2026 commitments, we are already looking ahead to 2027. And as Mary mentioned, based on what we know today, we believe we can grow revenue, margins, EBIT, and free cash flow next year.

Speaker #1: We are also building a select number of adjacent, higher-margin businesses, including GM Defense and GM Insurance, in a capital-efficient manner that leverages our capabilities.

Speaker #2: Several drivers support this view, including continued improvement in EV profitability, growth in on-star digital revenue, incremental warranty improvements, fixed cost efficiencies, a full year of our all-new Chevy Silverado and GMC Sierra pickups, and increased full-size SUV supply to meet demand in the U.S.

Speaker #1: These businesses are modest contributors today, but we are optimistic about the long-term opportunities they present and will continue to share progress as they scale.

Paul Jacobson: These businesses are modest contributors today, but we are optimistic about the long-term opportunities they present and will continue to share progress as they scale. While our primary focus is to deliver on our 2026 commitments, we are already looking ahead to 2027. As Mary mentioned, based on what we know today, we believe we can grow revenue, margins, EBIT, and free cash flow next year. Several drivers support this view, including continued improvement in EV profitability, growth in OnStar digital revenue, incremental warranty improvements, fixed cost efficiencies, a full year of our all-new Chevy Silverado and GMC Sierra pickups, and increased full-size SUV supply to meet demand in the US and in markets around the world. Additionally, as we also continue to repurchase shares, we can expect even further EPS growth.

Speaker #1: While our primary focus is to deliver on our 2026 commitments, we are already looking ahead to 2027. And as Mary mentioned, based on what we know today, we believe we can grow revenue, margins, EBIT, and free cash flow next year.

Speaker #2: and in markets around the world. Additionally, as we also continue to repurchase shares, we can expect even further EPS growth. With a broad portfolio of EV and ICE vehicles, we are well positioned to capture demand across segments and continue delivering ongoing value for both our customers and our shareholders.

Speaker #1: Several drivers support this view, including continued improvement in EV profitability, growth in OnStar digital revenue, incremental warranty improvements, fixed cost efficiencies, a full year of our all-new Chevy Silverado and GMC Sierra pickups, and increased full-size SUV supply to meet demand in the U.S.

Speaker #2: And with that, we'll move to the Q&A portion of the call.

Speaker #1: 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.

Speaker #1: and in markets around the world. Additionally, as we also continue to repurchase shares, we can expect even further EPS growth. With a broad portfolio of EV and ICE vehicles, we are well positioned to capture demand across segments and continue delivering ongoing value for both our customers and our shareholders.

Speaker #1: To ask a question, press star then 1 on your telephone keypad to join the queue. To withdraw your question, press star then 2. Our first question comes from the line of Joe Spak with UBS, your line is open.

Paul Jacobson: With a broad portfolio of EV and ICE vehicles, we are well-positioned to capture demand across segments and continue delivering ongoing value for both our customers and our shareholders. With that, we'll move to the Q&A portion of the call.

Speaker #1: And with that, we'll move to the Q&A portion of the call.

Speaker #3: Thanks, good morning everyone. Paul, I actually wanted to start with some of the commentary you just made on Super Cruise. And Mary, you mentioned the plus 160K Super Cruise-enabled pickup, standard on the high-end trims, and option on everything else.

Speaker #2: Thank you. As a reminder to analysts, we are asking that you limit your questions to one, with a brief follow-up, so that we may get to everyone on the call.

Operator: 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 then one on your telephone keypad to join the queue. To withdraw your question, press star then two. Our first question comes from the line of Joseph Spak with UBS. Your line is open.

Speaker #2: To ask a question, press * then 1 on your telephone keypad to join the queue. To withdraw your question, press * then 2. Our first question comes from the line of Joe Spack with UBS.

Speaker #3: So it's good to see that scaling but like right now, I think it's really only available on the high country, on the Silverado. That's like a 6, 7 thousand dollar package, maybe there's some discounts from time.

Speaker #2: Your line is open.

Speaker #3: Thanks. Good morning, everyone. Paul, I actually wanted to start with some of the commentary you just made on Super Cruise. And Mary, you mentioned the plus-160,000 Super Cruise-enabled pickups—standard on the high-end trims, and optional on everything else.

Joseph Spak: Thanks. Good morning, everyone. Paul, I actually wanted to start with some of the commentary you just made on Super Cruise. Mary, you mentioned the plus 160,000 Super Cruise enabled pickup, standard on the high-end trims and optional on everything else. It's good to see that scaling. Right now, I think it's really only available on the High Country, on the Silverado, that's like a $6,000, $7,000 package. Maybe there's some discounts from time. Even if we look across other vehicles, it looks like it's at least a $4,000 uprun option. That seems like it could be a pretty big potential tail into pricing in 2027, and I know you alluded to sort of tech as a pricing tail end for 2027.

Joe Spak: Thanks. Good morning, everyone. Paul, I actually wanted to start with some of the commentary you just made on Super Cruise. Mary, you mentioned the plus 160,000 Super Cruise enabled pickup, standard on the high-end trims and optional on everything else. It's good to see that scaling. Right now, I think it's really only available on the High Country, on the Silverado, that's like a $6,000, $7,000 package. Maybe there's some discounts from time. Even if we look across other vehicles, it looks like it's at least a $4,000 uprun option. That seems like it could be a pretty big potential tail into pricing in 2027, and I know you alluded to sort of tech as a pricing tail end for 2027.

Speaker #3: So and even if we look across other vehicles, it looks like it's at least a 4K upfront option. So that seems like it could be a pretty big potential tailwind to pricing in '27, and I know you alluded to sort of tech as a pricing tailwind for '27.

Speaker #3: So it's good to see that scaling, but like right now, I think it's really only available on the High Country on the Silverado. That's like a $6,000 to $7,000 package, maybe there's some discounts from time to time.

Speaker #3: But I guess what I'm really curious about here is, one, are we should we also expect Super Cruise to scale at least from an availability perspective across other vehicles?

Speaker #3: And even if we look across other vehicles, it looks like it's at least a $4,000 upfront option. So, that seems like it could be a pretty big potential tailwind to pricing in '27. I know you alluded to tech as a pricing tailwind for '27 as well.

Speaker #3: And then two, are you changing the pricing structure of Super Cruise at all as you democratize the solution either to the upfront costs or the eventual monthly charge?

Speaker #4: So, hey Joe, we continually evaluate based on the based on customer reception of Super Cruise. Of how we expanded in our also looking at pricing.

Speaker #3: But I guess what I'm really curious about here is, one, are we should we also expect Super Cruise to scale at least from an availability perspective across other vehicles, and then two, are you changing the pricing structure of Super Cruise at all as you democratize the solution either to the upfront costs or the eventual monthly charge?

Joseph Spak: I guess what I'm really curious about here is, one, should we also expect Super Cruise to scale, at least from an availability perspective across other vehicles. Then two, are you changing the pricing structure of Super Cruise at all as you democratize the solution, either to the upfront cost or the eventual monthly charge?

Joe Spak: I guess what I'm really curious about here is, one, should we also expect Super Cruise to scale, at least from an availability perspective across other vehicles. Then two, are you changing the pricing structure of Super Cruise at all as you democratize the solution, either to the upfront cost or the eventual monthly charge?

Speaker #4: So I don't have anything specific to announce today, but we do see the opportunity for the growth that we're going to see with the full-size the full-size truck launch, the light duties, and also we're expanding in three regions and continuing to add more miles.

Speaker #4: So, hey Joe, we continually evaluate based on customer reception of Super Cruise, of how we expand and are also looking at pricing. So I don't have anything specific to announce today, but we do see the opportunity for the growth that we're going to see with the full-size truck launch, the light duties.

Mary Barra: Hey, Joe. We continually evaluate based on customer reception of Super Cruise, of how we expand it, and are also looking at pricing. I don't have anything specific to announce today, but we do see the opportunity for the growth that we're going to see with the full-size truck launch, the light duties. Also we're expanding in three regions and continuing to add more miles. We think it's an option that customers like. We have a very high attach rate when they go out of the period that is included in the price of the vehicle. We're pretty optimistic that we're going to continue to grow that business. I don't know, did I miss anything there?

Speaker #4: So we think it's a option that customers like. We have a very high attach rate when they go out of their out of the period that is included in the price of the vehicle.

Speaker #4: So we're pretty optimistic that we're going to continue to grow that business. I know did I miss anything there?

Speaker #2: Yeah, I just add, Joe, that this is pretty consistent with what we've been saying for the last few years. The vehicles that are coming up on the end of the three years were produced at the tail end of the chip crisis, and we know Super Cruise was one of the more impacted ones.

Speaker #4: And also, we're expanding in three regions and continuing to add more miles. So we think it's an option that customers like. We have a very high attach rate when they go out of the period that is included in the price of the vehicle.

Speaker #2: So we're starting to see this scale, but I think it's not just '27, it's beyond that. And that's why we keep leaning into the digital revenue story with 6.3 billion dollars of deferred revenue on the balance sheet already.

Speaker #4: So we're pretty optimistic that we're going to continue to grow that business. I know—did I miss anything there?

Speaker #1: Yeah, I'd just add, Joe, that this is pretty consistent with what we've been saying for the last few years. The vehicles that are coming up on the end of the three years were produced at the tail end of the chip crisis, and we know Super Cruise was one of the more impacted ones.

Paul Jacobson: Yeah. I'd just add, Joe, that this is pretty consistent with what we've been saying for the last three years. The vehicles that are coming up on the end of the three years were produced at the tail end of the chip crisis, and we know Super Cruise was one of the more impacted ones. We're starting to see this scale, but I think it's not just 2027, it's beyond that. That's why we keep leaning into the digital revenue story with $6.3 billion of deferred revenue on the balance sheet already. That's approaching 7.5 by the end of the year. As Mary mentioned, 1 million additional subscriptions this year, across the digital portfolio. Super Cruise is a piece of that. We're seeing really encouraging attachment rates in the 30% to 40% range, as Mary mentioned.

Speaker #2: That's approaching 7.5 by the end of the year. And as Mary mentioned, a million additional subscriptions this year. Across the digital portfolio, Super Cruise is a piece of that.

Speaker #2: So we're seeing really encouraging attachment rates in the 30 to 40 percent range, as Mary mentioned. And now the next strategy is how do you proliferate it and how do you expand it to make it more available?

Speaker #1: So we're starting to see this scale, but I think it's not just '27—it's beyond that. And that's why we keep leaning into the digital revenue story, with $6.3 billion of deferred revenue on the balance sheet already.

Speaker #2: That's possible as we get costs down and as the product continues to evolve. So it's not just about '27. We think it goes even beyond that.

Speaker #1: That's approaching 7.5 million by the end of the year. And as Mary mentioned, a million additional subscriptions this year. Across the digital portfolio, Super Cruise is a piece of that.

Speaker #2: Why we've spent a good bit of time talking about what the future looks like across the entirety of a GM car park that's got software-enabled features.

Speaker #1: So we're seeing really encouraging attachment rates in the 30-40% range, as Mary mentioned. And now the next strategy is, how do you proliferate it and how do you expand it to make it more available?

Paul Jacobson: Now the next strategy is how do you proliferate it and how do you expand it to make it more available? That's possible as we get cost down and as the product continues to evolve. It's not just about 2027. We think it goes even beyond that and why we've spent a good bit of time talking about what the future looks like across the entirety of a GM car park that's got software-enabled features.

Speaker #3: Okay, thank you. Second one is just on warranty, which seems like it was it's sort of coming in more favorable. I was wondering if you could maybe quantify how much warranty helped on a year-over-year basis in the quarter.

Speaker #1: That's possible as we get costs down and as the product continues to evolve. So it's not just about '27—we think it goes even beyond that, and that's why we've spent a good bit of time talking about what the future looks like across the entirety of a GM car park that's got software-enabled features.

Speaker #3: And then if I recall, I think it's the third quarter where you typically have this reevaluation and potential reset of accrual rates. So with respect to your fullier commentary on warranty, I just want to make sure that really that's just sort of the better experience you've seen to date.

Speaker #3: Okay, thank you. Second one is just on warranty, which seems like it was sort of coming in more favorable. I was wondering if you could maybe quantify how much warranty helped on a year-over-year basis in the quarter.

Joseph Spak: Okay, thank you. Second one is, just on warranty, which seems like it's sort of coming in more favorable. Was wondering if you could maybe quantify how much warranty helped on a year-over-year basis in the quarter. Then if I recall, I think it's the Q3 where you typically have this reevaluation and potential reset of accrual rates. With respect to your full year commentary on warranty, I just want to make sure that really that's just sort of the better experience you've seen to date, and then there's maybe some potential for a reset to lower accruals later this year as well. Is that correct?

Joe Spak: Okay, thank you. Second one is, just on warranty, which seems like it's sort of coming in more favorable. Was wondering if you could maybe quantify how much warranty helped on a year-over-year basis in the quarter. Then if I recall, I think it's the Q3 where you typically have this reevaluation and potential reset of accrual rates. With respect to your full year commentary on warranty, I just want to make sure that really that's just sort of the better experience you've seen to date, and then there's maybe some potential for a reset to lower accruals later this year as well. Is that correct?

Speaker #3: And then there's maybe some potential for a reset to lower accruals. Later this year as well. Is that correct?

Speaker #2: Yeah, so as we said in the prepared remarks, Joe, it's about 500 million dollars of benefit in the first half of the year. And we increased from a billion dollar year-over-year tailwind to a billion to a billion and a half.

Speaker #3: And then if I recall, I think it's the third quarter where you typically have this reevaluation and potential reset of the accrual rate. So with respect to your earlier commentary on warranty, I just want to make sure that really that's just sort of the better experience you've seen to date.

Speaker #2: That's really as we're starting to look at what the September quarter Q3 adjustment will be. And as we go forward. So we continue to see some good trends.

Speaker #3: And then there's maybe some potential for a reset to lower accruals later this year as well. Is that correct?

Speaker #2: It's not without some new challenges that pop up from time to time. But I think the team overall is executing well. And we think that this is part of the multi-year tailwind.

Speaker #1: Yeah, so as we said in the prepared remarks, Joe, it's about $500 million of benefit in the first half of the year. And we increased from a $1 billion year-over-year tailwind to $1 billion to $1.5 billion.

Paul Jacobson: As we said in the prepared remarks, Joe, it is about $500 million of benefit in H1. We increased from a $1 billion year-over-year tailwind to $1 billion to $1.5 billion. That is really as we are starting to look at what the September quarter Q3 adjustment will be, and as we go forward. We continue to see some good trends. It is not without some new challenges that pop up from time to time. I think the team overall is executing well. We think that this is part of the multi-year tailwind. Ideally, as we have talked about before, the monthly cash outflows plateau and then start to come down, as we get through some of these historic quality spills, et cetera.

Speaker #2: So ideally, as we've talked about before, the monthly cash outflows plateau and then start to come down as we get through some of these historic quality spills, et cetera.

Speaker #1: That's really as we're starting to look at what the September quarter, Q3, adjustment will be, and as we go forward. So we continue to see some good trends.

Speaker #2: And that's where we can see benefit into '27 and '28, beyond what we're seeing in '26.

Speaker #1: It's not without some new challenges that pop up from time to time, but I think the team overall is executing well. We think that this is part of the multi-year tailwind.

Speaker #4: I would also say we're using a lot of additional tool simulation artificial intelligence to find problems earlier or make sure we validate more which is going to be evident in the truck that we're launching.

Speaker #1: So ideally, as we've talked about before, the monthly cash outflows plateau and then start to come down as we get through some of these historic quality spills, et cetera.

Speaker #4: So there's a lot going on to make sure the products are of higher quality. And even looking at the longer-term durability as well.

Speaker #1: And that's where we can see benefit into '27 and '28 beyond what we're seeing in '26.

Paul Jacobson: That is where we can see benefit into 2027 and 2028 beyond what we are seeing in 2026.

Speaker #3: Thank you very much.

Speaker #4: I would also say we're using a lot of additional tools—simulation, artificial intelligence—to find problems earlier and make sure we validate more, which is going to be evident in the truck that we're launching.

Mary Barra: I would also say we are using a lot of additional tools, simulation, artificial intelligence to find problems earlier or make sure we validate more, which is going to be evident in the truck that we are launching. There is a lot going on to make sure the products are of higher quality and even looking at the longer-term durability as well.

Speaker #2: Thanks, Joe.

Speaker #1: Thank you. The next question comes from Dan Levy with Barclays. Your line is open.

Speaker #5: Hi, good morning. Thank you for taking the questions. Just wanted to start with a question on the 2026 guidance. I think when we add up some of the pieces here between better pricing, better warranty, looks like your wholesales are slightly better.

Speaker #4: So there's a lot going on to make sure the products are of higher quality, and even looking at the longer-term durability as well.

Speaker #3: Thank you very much.

Joseph Spak: Thank you very much.

Joe Spak: Thank you very much.

Speaker #1: Thanks, Joe.

Paul Jacobson: Thanks, Joe.

Speaker #5: And then you're talking about slightly better commodities. It seems to add up to somewhat more than the guidance raise that you should. I know there is a range and whatnot, but maybe you could just talk to what potential offsets there are versus all of those positives.

Speaker #2: Thank you. The next question comes from Dan Levy with Barclays. Your line is open.

Operator: Thank you. The next question comes from Dan Levy with Barclays. Your line is open.

Speaker #5: Hi, good morning. Thank you for taking the questions. I just wanted to start with a question on the 2026 guidance. I think when we add up some of the pieces here—between better pricing, better warranty—it looks like your wholesales are slightly better.

Dan Levy: Hi. Good morning. Thank you for taking the questions. Just wanted to start with a question on the 2026 guidance. I think when we add up some of the pieces here between better pricing, better warranty, looks like your wholesales are slightly better, you're talking about slightly better commodities. It seems to add up to somewhat more than the guidance raise that you issued. I know there's a range and whatnot, maybe you could just talk to what potential offsets there are versus all of those positives.

Speaker #2: Hey Dan, good morning. Thanks for the question. On the commodity piece, I don't I want to make sure that we're really clear. I don't think we're projecting lower commodity prices for the second half than the first half.

Speaker #5: And then you're talking about slightly better commodities. It seems to add up to somewhat more than the guidance raise that you issued. I know there is a range and whatnot, but maybe you could just talk to what potential offsets there are versus all of those positives.

Speaker #2: What we saw when we raised the cost guidance in Q1, we continue to see prices increase after that first quarter earnings day. So while we've seen a little bit of coming off of it, it's still right in line with where our cost guidance and commodity guidance has been.

Speaker #1: Hey Dan, good morning. Thanks for the question. On the commodity piece, I want to make sure that we're really clear. I don't think we are projecting lower commodity prices for the second half than the first half.

Paul Jacobson: Hey, Dan. Good morning. Thanks for the question. On the commodity piece, I want to make sure that we're really clear. I don't think we are projecting lower commodity prices for the H2 than the H1. What we saw when we raised the cost guidance in Q1, we continued to see prices increase after that Q1 earnings date. While we've seen a little bit of coming off of it's still right in line with where our cost guidance and commodity guidance has been. The reason for the guidance raise is, okay, if we believe that it's plateaued here, we can bank what we've sort of earned ahead of expectations in the H1 of the year. That's why we wanted to be cautious and say it doesn't assume that we have significantly more inflation, a flare-up of conflict, et cetera.

Speaker #2: So the reason for the guidance raise is, okay, if we believe that it's plateaued here, we can bank what we've sort of earned ahead of expectations in the first half of the year.

Speaker #1: What we saw when we raised the cost guidance in Q1—we continued to see prices increase after that first quarter earnings date. So while we've seen a little bit of coming off of it, it's still right in line with where our cost guidance and commodity guidance have been.

Speaker #2: So that's why we wanted to be cautious and say it doesn't assume that we have significantly more inflation flare-up of conflict, et cetera. So I just want to make sure that we're not confusing that with a tailwind from where we were just a few months ago.

Speaker #1: So, the reason for the guidance raise is, okay, if we believe that it's plateaued here, we can bank what we've sort of earned ahead of expectations in the first half of the year.

Speaker #2: It really has stabilized a bit at those estimated levels. So when you think about the year, we know that some of the cost pressures that we talked about as we ramp up Orion and make the investments and some of the deram inflation was backloaded.

Speaker #1: So that's why we wanted to be cautious and say it doesn't assume that we have significantly more inflation, flare-up of conflict, et cetera. So I just want to make sure that we're not confusing that with a tailwind from where we were just a few months ago.

Speaker #2: But what we're saying is the initiatives that we've undertaken the benefits that we're seeing in pricing and warranty are helping to overcome that and give us more confidence about the full year given our first half out performance.

Paul Jacobson: I just want to make sure that we're not confusing that with a tailwind for utilized a bit at those estimated levels. When you think about the year, we know that some of the cost pressures that we talked about as we ramp up Orion and make the investments and some of the DRAM inflation was back-loaded. What we're saying is the initiatives that we've undertaken, the benefits that we're seeing in pricing and warranty, are helping to overcome that and give us more confidence about the full year, given our H1 outperformance. Sorry, that was a long answer.

Speaker #1: It really has stabilized a bit at those estimated levels. So when you think about the year, we know that some of the cost pressures that we talked about as we ramp up Orion and make the investments, and some of the Durham inflation, was backloaded.

Speaker #2: Sorry, that was a long answer.

Speaker #5: Great. Thank you. As a second question, I wanted to double-click on the new truck launch. And your materials point to opportunity on the pricing side.

Speaker #1: But what we're saying is the initiatives that we've undertaken the benefits that we're seeing in pricing and warranty are helping to overcome that and give us more confidence about the full year given our first half outperformance.

Speaker #5: Now, I think anyone that's just looking at the third-party data fees just how well the trucks are doing just very, very dominant share imagine that that's somewhat contributing to your pricing strength as well.

Speaker #1: Sorry, that was a long answer.

Speaker #5: Great, thank you. As a second question, I wanted to double-click on the new truck launch. Your materials point to opportunity on the pricing side.

Dan Levy: Great. Thank you. As a second question, I wanted to double-click on the new truck launch. Your materials point to opportunity on the pricing side. Now, I think anyone that's just looking at the third-party data sees just how well the trucks are doing, just very dominant share. Imagine that that's somewhat contributing to your pricing strength as well. Help us understand from this position of strength that you're in, how much incremental benefit there is.

Speaker #5: But help us understand from this position of strength that you're in, how much incremental benefit there is. I mean, maybe you could talk about what specifically is driving that upside on pricing.

Speaker #5: Now, I think anyone that's just looking at the third-party data sees just how well the trucks are doing—just very, very dominant share. I imagine that's somewhat contributing to your pricing strength as well.

Speaker #5: And maybe you could put this in context of and I know this is a question that keeps on coming up. The competitive environment where there's one of your competitors that seems to be at a position where they have to catch up quite a bit.

Speaker #5: But help us understand, from this position of strength that you're in, how much incremental benefit there is. I mean, maybe you could talk about what specifically is driving that upside on pricing.

Speaker #5: But put that in context of the broader environment where you're already in a very strong position. You're saying things can get even better from here.

Speaker #2: Yeah, so I think we're incredibly pleased with the current generation of trucks and how they've held up in terms of pricing. We haven't seen the typical heavy discounting at the end of the cycle that I think is permeated the historical models.

Dan Levy: Maybe you could talk about what specifically is driving that upside on pricing, and maybe you could put this in context of, and I know this is a question that keeps on coming up, the competitive environment where there's one of your competitors that seems to be at a position where they have to catch up quite a bit, but put that in context of the broader environment where you're already in a very strong position. You're saying things can get even better from here.

Speaker #5: And maybe you could put this in context, and I know this is a question that keeps on coming up—the competitive environment, where there’s one of your competitors that seems to be in a position where they have to catch up quite a bit.

Speaker #5: But put that in context of the broader environment where you're already in a very strong position. You're saying things can get even better from here.

Speaker #2: But as you look at every new model year, every new launch, like this, we're adding new features, we're adding new functionality. Across the board.

Speaker #1: Yeah, so I think we're incredibly pleased with the current generation of trucks and how they've held up in terms of pricing. We haven't seen the typical heavy discounting at the end of the cycle that I think has terminated the permeated the historical models.

Paul Jacobson: Yeah. I think, we're incredibly pleased with the current generation of trucks and how they've held up in terms of pricing. We haven't seen the typical heavy discounting at the end of the cycle that I think has permeated the historical models. As you look at every new model year, every new launch like this, we're adding new features, we're adding new functionality across the board, and we'll see an opportunity where we can to potentially take price across the board. We expect really strong demand. As always, there's a little bit of a richer trim mix as you're starting to ramp up production as well. I think all of those contribute, but when you look at the strength of the vehicles, the way they've held up, the market share strength that we've had, it looks really promising, and we're excited about the next generation of trucks.

Speaker #2: And we'll see an opportunity where we can, to potentially take price across the board. We expect really strong demand as always. There's a little bit of a richer trim mix as you're starting to ramp up production.

Speaker #2: As well. So I think all of those contribute. But when you look at the strength of the vehicles, the way they've held up, the market share, strength that we've had, it looks really, really promising.

Speaker #1: But as you look at every new model year, every new launch like this, we're adding new features, we're adding new functionality across the board.

Speaker #2: And we're excited about the next generation of trucks.

Speaker #1: And we'll see an opportunity where we can, to potentially take price across the board. We expect really strong demand as always. There's a little bit of a richer trim mix as you're starting to ramp up production as well.

Speaker #5: And is the pricing piece partially just a trim comment or is it?

Speaker #2: I mean, we haven't made any public comments about how that's going to price. We're going to continue to look at the market. But I would say that we're optimistic as we are with most new vehicle launches.

Speaker #1: So I think all of those contribute. But when you look at the strength of the vehicles, the way they've held up, the market share strength that we've had, it looks really, really promising.

Speaker #4: Right now, the reception has been really strong on the truck. Remember, we're at record levels of production this year. I stated that we're going to maintain those next year as we're launching.

Speaker #1: And we're excited about the next generation of trucks.

Speaker #5: And is the pricing piece partially just a trim comment, or just…?

Dan Levy: Is the pricing piece partially just a trim comment or just?

Speaker #4: And as well as new engines. And then there is upside opportunity really as we get into the end of 2027, 2028. Because we've got all the launches going through the year.

Speaker #1: I mean, we haven't made any public comments about how that's going to price. We're going to continue to look at the market. But I would say that we're optimistic, as we are with most new vehicle launches.

Paul Jacobson: We haven't made any public comments about how that's going to price. We're going to continue to look at the market. I would say that we're optimistic as we are with most new vehicle launches.

Speaker #4: So we're going to build on a really strong year with what we think is a truck customers are going to love from a performance perspective.

Speaker #4: And design performance technology. So I think it's going to just continue the momentum we have in the truck market of leading from an overall share perspective.

Mary Barra: Right now, the reception has been really strong on the truck. Remember, we're at record levels of production this year. I stated that we're going to maintain those next year as we're launching, as well as new engines. There is upside opportunity really as we get into the end of 2027, 2028, because we've got all the launches going through the year. We're going to build on a really strong year with what we think is a truck customers are going to love from a performance perspective and design performance technology. I think it's going to just continue the momentum we have in the truck market of leading from an overall share perspective.

Speaker #4: And then there is upside opportunity, really, as we get into the end of '27 and '28, because we've got all the launches going through the year.

Speaker #5: Great. Thank you.

Speaker #2: Thanks, Dan.

Speaker #3: Thank you. The next question comes from Andrew Percoco with Morgan Stanley. Your line is open.

Speaker #4: So we're going to build on a really strong year with what we think is a truck customers are going to love from a performance perspective and design performance technology.

Speaker #5: Great. Thanks so much for taking the questions this morning. I wanted to start off, Mary, you mentioned in your prepared remarks everything that you're doing on GM defense and how that's helping diversify the business.

Speaker #4: So I think it's going to just continue the momentum. We haven't the truck market of leading from an overall share perspective.

Speaker #5: Great. Thank you.

Dan Levy: Great. Thank you.

Speaker #5: But I did want to double-click on the investments that you guys have made in sodium-ion battery storage with peak energy. And just get a better understanding of what your strategy is and why you chose to go down that path.

Speaker #1: Thanks, Dan.

Paul Jacobson: Thanks, Dan.

Speaker #2: Thank you. The next question comes from Andrew Pococo. Would Morgan Stanley, your line is open.

Operator: Thank you. The next question comes from Andrew Pokoko with Morgan Stanley. Your line is open.

Operator: Thank you. The next question comes from Andrew Percoco with Morgan Stanley. Your line is open.

Speaker #5: Great, thanks so much for taking the questions this morning. I wanted to start off—Mary, you mentioned in your prepared remarks everything that you're doing on GM Defense and how that's helping diversify the business.

Andrew Pokoko: Great. Thanks so much for taking the questions this morning. I wanted to start off, Mary, you mentioned in your prepared remarks everything that you're doing on GM Defense and how that's helping diversify the business. I did want to double-click on the investments that you guys have made in sodium-ion battery storage with Peak Energy and just get a better understanding of what your strategy is and why you chose to go down that path and what that might look like for your business over the next, call it 18 to 24 months. Just trying to get a better understanding of how you're going to essentially leverage your manufacturing scale, your supply chains to be relevant in the energy storage market. We're obviously seeing some of your competitors do this as well.

Andrew Percoco: Great. Thanks so much for taking the questions this morning. I wanted to start off, Mary, you mentioned in your prepared remarks everything that you're doing on GM Defense and how that's helping diversify the business. I did want to double-click on the investments that you guys have made in sodium-ion battery storage with Peak Energy and just get a better understanding of what your strategy is and why you chose to go down that path and what that might look like for your business over the next, call it 18 to 24 months. Just trying to get a better understanding of how you're going to essentially leverage your manufacturing scale, your supply chains to be relevant in the energy storage market. We're obviously seeing some of your competitors do this as well. Just curious to get a better understanding of your thought process around sodium-ion and what you see as the commercialization timeline there.

Speaker #5: And what that might look like for your business over the next, call it, 18 to 24 months. Just trying to get a better understanding of how you're going to essentially leverage your manufacturing scale, your supply chains to be relevant in the energy storage market.

Speaker #5: But I did want to double-click on the investments that you guys have made in sodium-ion battery storage with Peak Energy and just get a better understanding of what your strategy is, why you chose to go down that path, and what that might look like for your business over the next, call it, 18 to 24 months.

Speaker #5: We're obviously seeing some of your competitors do this as well. So just curious to get a better understanding of your thought process around sodium-ion and what you see as the commercialization timeline there.

Speaker #4: Sure. Well, first of all, we think sodium-ion batteries are an emerging battery chemistry that is going to be attractive and have advantages over other chemistries from a stationary storage perspective.

Speaker #5: Just trying to get a better understanding of how you're going to essentially leverage your manufacturing scale, your supply chains to be relevant in the energy storage market.

Speaker #4: We think that sodium offer could offer lower cost over time than LFP. And as we know, there's an abundance of sodium there's also a potential for a simpler system designs.

Andrew Pokoko: Just curious to get a better understanding of your thought process around sodium-ion and what you see as the commercialization timeline there.

Speaker #4: So we think it's really well suited for grid storage. Also, it's has strong performance across a wide range of temperatures. And there is potentially lower cooling and maintenance requirements.

Mary Barra: Well, first of all, we think sodium-ion batteries are an emerging battery chemistry that is going to be attractive and have advantages over other chemistries from a stationary storage perspective. We think that sodium offer could offer lower cost over time than LFP. As we know, there's an abundance of sodium. There's also a potential for simpler system designs. We think it's really well suited for grid storage. Also it has strong performance across a wide range of temperatures. There is potentially lower cooling and maintenance requirements. Again, we think this technology is very promising. We're working with Peak because we think it's going to be the next generation.

Speaker #4: We think that sodium offer could offer lower cost over time than LFP. And as we know, there's an abundance of sodium there's also a potential for a simpler system designs.

Speaker #4: But there's real work going on with development milestones. And a plan to how we would commercialize that we'll share more about over time. But we think peak is a real opportunity with this technology.

Speaker #4: So we think it's really well suited for grid storage. Also, it has strong performance across a wide range of temperatures, and there are potentially lower cooling and maintenance requirements.

Speaker #4: And we're going to continue to develop it. Because again, there's going to be more and more need. And ultimately, if the technology is promising, it could even find its way into vehicles, which we've got rights to that.

Speaker #4: So again, we think this technology is very promising. We're working with peak because we think it's going to be the next generation. And when you say year to 18 month, it's a little further out, but there's real work going on with development milestones and a plan to how we would commercialize that we'll share more about over time.

Mary Barra: When you say year to 18 months, it's a little further out, but there's real work going on with development milestones and a plan to how we would commercialize, that we'll share more about over time. We think Peak is a real opportunity with this technology. We're going to continue to develop it because, again, there's going to be more and more need, and ultimately, if the technology is promising, it could even find its way into vehicles, which we've got rights to that. I don't know, Paul, if you have anything you want to add.

Speaker #4: So I don't know, Paul, if you have anything you want to add.

Speaker #2: Yeah. And Andrew, I think this has been obviously a topic across the industry. We've tried to approach it from, first of all, capital discipline, as we look at the restructuring that we've done and so on.

Speaker #4: But we think peak is a real opportunity with this technology. And we're going to continue to develop it because again, there's going to be more and more need.

Speaker #2: The idea, and we turned down opportunities to put billions of dollars of capital into plants to tool up for what is already a highly competitive business based on potential extension of government credits and tax credits, etc.

Speaker #4: And ultimately, if the technology is promising, it could even find its way into vehicles, which we've got rights to that. So I don't know, Paul, if you have anything you want to add.

Speaker #1: Yeah. And Andrew, I think this has been obviously a topic across the industry. We've tried to approach it from first of all, capital discipline as we look at the restructuring that we've done and so on.

Paul Jacobson: Yeah. Andrew, I think this has been obviously a topic across the industry. We've tried to approach it from, first of all, capital discipline as we look at the restructuring that we've done and so on. The idea, we turned down opportunities to put $ billions of capital into plants to tool up for what is already a highly competitive business based on potential extension of government credits and tax credits, et cetera. I think really what we're looking at here is how do we partner with technology that has synergies to the overall business, do it in a capital efficient manner.

Speaker #2: I think really what we're looking at here is how do we partner with technology that has synergies to the overall business. Do it in a capital-efficient manner.

Speaker #1: The idea and we turned down opportunities to put billions of dollars of capital into plants to tool up for what is already a highly competitive business based on potential extension of government credits and tax credits, etc.

Speaker #2: And what we found in peak was the promise of a lot of technology, the ability to scale in something that we think is going to be cost-effective while at the same time we don't have to invest billions of dollars of capital to do it.

Speaker #2: So we have a lot of optionality to participate to participate. As we choose. So we're optimistic. And in conversations with them, we think that there's a really good growth platform.

Speaker #1: I think really what we're looking at here is how do we partner with technology that has synergies to the overall business, do it in a capital-efficient manner, and what we found in peak was the promise of a lot of technology, the ability to scale in something that we think is going to be cost-effective while at the same time we don't have to invest billions of dollars of capital to do it.

Speaker #2: But we're going to be cautious rather than going all in into a hyper-competitive business.

Paul Jacobson: What we found in Peak was the promise of a lot of technology, the ability to scale in something that we think is going to be cost effective, while at the same time, we don't have to invest $ billions in capital to do it. We have a lot of optionality to participate as we choose. We're optimistic and in conversations with them, we think that there's a really good growth platform. We're going to be cautious, rather than going all in into a hyper-competitive business.

Speaker #4: And I'll just add from a timing perspective. We believe that we'll be building production-validated cells on campus in our battery cell development center. And the 2027, 2028 timeframe.

Speaker #1: So we have a lot of optionality to participate as we choose, so we're optimistic. And in conversations with them, we think that there's a really good growth platform.

Speaker #4: And we hope to be in production before the end of the decade, which isn't that far away with all new technology.

Speaker #5: Appreciate that. That's great context. And then maybe my second question, just as it relates to you. I know there's obviously a lot of attention on affordability.

Speaker #1: But we're going to be cautious, rather than going all in into a hyper-competitive business.

Speaker #4: And I'll just add from a timing perspective, we believe that we'll be building production-validated cells on campus in our Battery Cell Development Center.

Mary Barra: I'll just add from a timing perspective, we believe that we'll be building production validated cells on campus in our battery cell development center in the 2027, 2028 timeframe. We hope to be in production before the end of the decade, which isn't that far away with all new technology.

Speaker #5: Doesn't seem to have really had an impact yet on demand for trucks. I know sometimes it takes a while for that to flow through.

Speaker #4: And the 27, 28 timeframe. And we hope to be in production before the end of the decade, which isn't that far away with all new technology.

Speaker #5: I'm just curious, as you think about your guidance for the remainder of the year and as obviously you made some comments about 2027, are you anticipating a makeshift more towards crossovers, understanding they're more profitable today than they maybe were two years ago?

Speaker #5: I appreciate that. That's great context. And then maybe my second question, just as it relates to you, I know there's obviously a lot of attention on affordability.

Andrew Pokoko: Appreciate that. That's great context. Maybe my second question, just as it relates to, I know there's obviously a lot of attention on affordability. Doesn't seem to have really had an impact yet on demand for trucks. I know sometimes it takes a while for that to flow through. I'm just curious, as you think about your guidance for the remainder of the year, as obviously you made some comments about 2027, are you anticipating a mix shift more towards crossovers, understanding they're more profitable today than they maybe were 2 years ago? Just curious if you've made any underlying assumptions for that mix shift into maybe smaller, more fuel efficient vehicles in the back half of the year and into 2027.

Andrew Percoco: Appreciate that. That's great context. Maybe my second question, just as it relates to, I know there's obviously a lot of attention on affordability. Doesn't seem to have really had an impact yet on demand for trucks. I know sometimes it takes a while for that to flow through. I'm just curious, as you think about your guidance for the remainder of the year, as obviously you made some comments about 2027, are you anticipating a mix shift more towards crossovers, understanding they're more profitable today than they maybe were 2 years ago? Just curious if you've made any underlying assumptions for that mix shift into maybe smaller, more fuel efficient vehicles in the back half of the year and into 2027.

Speaker #5: But just curious if you've made any underlying assumptions for that makeshift into maybe smaller, more fuel-efficient vehicles in the back half of the year and into 2027.

Speaker #5: Doesn't seem to have really had an impact yet on demand for trucks. I know sometimes it takes a while for that to flow through.

Speaker #5: I'm just curious, as you think about your guidance for the remainder of the year and, obviously, you made some comments about 2027, are you anticipating a makeshift more towards crossovers, understanding they're more profitable today than they maybe were two years ago?

Speaker #4: Andrew, that's been predicted for several months now. And it's just not happening. We're seeing really strong full-size truck demand and full-size utility for that matter.

Speaker #4: We're building everything that we can sell. And but to your point, we're going to be we're going to be guided by the consumer. And I mentioned how we've improved the profitability of our SUVs.

Speaker #5: But just curious if you've made any underlying assumptions for that makeshift into maybe smaller, more fuel-efficient vehicles in the back half of the year and into 2027.

Speaker #4: Across the board. So I think we're extremely well positioned from an affordability perspective to meet the customer where we are. But we're just not seeing it.

Speaker #4: Well, Andrew, that's been predicted for several months now. And it's just not happening. We're seeing really strong full-size truck demand and full-size utility for that matter.

Mary Barra: Well, I know that's been predicted for several months now, it's just not happening. We're seeing really strong full-size truck demand and full-size utility for that matter. We're building everything that we can sell. To your point, we're going to be guided by the consumer, I mentioned how we've improved the profitability of our SUVs across the board. I think we're extremely well-positioned from an affordability perspective to meet the customer where we are, we're just not seeing it. I think something would have to happen for a long period of time before people would make potentially a different decision. We're seeing strength, even though it's been predicted now for probably about 3 or 4 months.

Speaker #4: I think if something would have to happen for a long period of time before people would make potentially a different decision. So we're seeing strength even though it's been predicted now for about probably about three or four months.

Speaker #5: Great. Thank you so much.

Speaker #4: Across the board. So I think we're extremely well positioned from an affordability perspective to meet the customer where we are. But we're just not seeing it.

Speaker #1: Thank you. The next question comes from line of Itay Michaeli, with PD Callao. And your line is open.

Speaker #4: I think if something were to happen for a long period of time, people would potentially make a different decision. So we're seeing strength, even though it's been predicted now for probably about three or four months.

Speaker #6: Oh, great. Thanks. Good morning, everybody. Just a first question, just on the updated GM&A pricing environment for the year. Great to see the strength in the first half of the year.

Speaker #6: I do think the second half implied pricing does kind of moderate off the first half. And I'm curious whether that's kind of reflecting anything you're seeing thus far, like in July, or just kind of maybe more of a standard assumption and perhaps a bit of conservatism.

Speaker #5: Great. Thank you so much.

Andrew Pokoko: Great. Thank you so much.

Andrew Percoco: Great. Thank you so much.

Speaker #2: Thank you. The next question comes from line of Seetide McKelly with TD Cowan. Your line is open.

Operator: Thank you. The next question comes from the line of Itay Michaeli with TD Cowen. Your line is open.

Speaker #2: Hey, Itay. Thanks for the question. I would classify it more as just kind of lapping the prior year pricing actions. From where we were.

Speaker #6: Oh, great. Thanks. Good morning, everybody. Just a first question, just on the updated GM&A pricing environment for the year, great to see the strength in the first half of the year.

Itay Michaeli: Great. Thanks. Good morning, everybody. Just as our first question, just on the updated GM and A pricing environment for the year. Great to see the strength in the H1 of the year. I do think the H2 implied pricing does kind of moderate off the H1, I'm curious whether that's kind of reflecting anything you're seeing thus far, like in July, or just kind of maybe more of a standard assumption and perhaps a bit of conservatism.

Speaker #2: So as we said going into the year, model year 2026, we took some pricing actions. That's got the tailwind. Those have held up strong.

Speaker #2: The incentive environment has remained fairly consistent. We're not projecting any change to that. It's just the calendar.

Speaker #6: Got it. That's helpful. And then the second question, kind of going back to the new trucks into next year. And I appreciate the update on that.

Paul Jacobson: Hey, Itay. Thanks for the question. I would classify it more as just kind of lapping the prior year pricing actions from where we were. As we said, going into the year, model year 2026, we took some pricing actions that's got the tailwind. Those have held up strong. The incentive environment has remained fairly consistent. We're not projecting any change to that. It's just the calendar.

Speaker #1: Hey, Todd, thanks for the question. I would classify it more as just kind of lapping the prior year pricing actions. From where we were, so as we said, going into the year, model year 26, we took some pricing actions.

Speaker #6: You've been asked before on pricing, but I'm curious whether there's also some potential variable cost tailwind you could enjoy just given the easing emissions standards.

Speaker #1: That's got the tailwind. Those have held up strong. The incentive environment has remained fairly consistent. We're not projecting any change to that; it's just the calendar.

Speaker #6: That maybe allows you to reinvest that back into new content, to drive pricing, and maybe share at higher trims. Or even kind of flow that to the bottom line.

Speaker #6: Got it. That's helpful. And then the second question kind of going back to the new trucks into next year, and I appreciate the update on that.

Itay Michaeli: Got it. That's helpful. The second question, kind of going back to the new trucks into next year, I appreciate the update on that. You've been asked before on pricing, but I'm curious whether there's also some potential variable cost tailwinds you could enjoy, just given the easing emissions standards that maybe allows you to reinvest that back into new content to drive pricing and maybe share it higher trims or even kind of flow that to the bottom line. Maybe if you can comment maybe overall on kind of how to think about the VP per unit, roughly of the new trucks versus the outgoing trucks. Thank you.

Speaker #6: And maybe if you can comment maybe overall on kind of how to think about the VP per unit roughly of the new trucks versus the outgoing trucks.

Speaker #6: Thank you.

Speaker #6: You've been asked before on pricing, but I'm curious whether there's also some potential variable cost tailwinds you could enjoy just given the easing emissions standards.

Speaker #2: Yeah, Itay. So when you look at the sort of current trucks that are being produced, they're already receiving that benefit. So there's not really anything incremental.

Speaker #2: We're actually driving even more efficiency in the Gen 6 as well. So on a variable profit, it'll normalize. And we expect better if particularly if we're able to take additional pricing.

Speaker #6: That maybe allows you to reinvest that back into new content, drive pricing, and maybe share at higher trims, or even kind of flow that to the bottom line.

Speaker #6: And maybe if you can comment maybe overall on kind of how to think about the VP per unit roughly of the new trucks versus the outgoing trucks.

Speaker #6: Thank you.

Speaker #2: But it's going to take a little bit of time because as you know, with the ramp-up and the transition, there's some costs that we incur.

Speaker #1: Yeah, Itai. So when you look at the sort of current trucks that are being produced, they're already receiving that benefit. So there's not really anything incremental.

Paul Jacobson: Yeah, Itay. When you look at the sort of current trucks that are being produced, they're already receiving that benefit, so there's not really anything incremental. We're actually driving even more efficiency in the Gen 6 as well. On a variable profit, it'll normalize and we expect better particularly if we're able to take additional pricing. It's going to take a little bit of time because, as you know, with the ramp up in the transition, there's some costs that we incur over that time period. That's why we've classified this as potentially more of a 2027 and beyond tailwind than anything material this year, even though the trucks will start to hit the showrooms at the end of the year.

Speaker #2: Over that time period. So that's why we've classified this as potentially more of a 2027 and beyond tailwind than anything material this year. Even though the trucks will start to hit the showrooms at the end of the year.

Speaker #1: We're actually driving even more efficiency in Gen 6 as well. So, on a variable profit basis, it'll normalize, and we expect better—particularly if we're able to take additional pricing.

Speaker #6: That's very helpful. Great. Thank you.

Speaker #2: Yep. Thanks, Itay.

Speaker #1: Thank you. The next question comes from Mike Ward with Citigroup. Your line is open.

Speaker #1: But it's going to take a little bit of time because, as you know, with the ramp-up and the transition, there are some costs that we incur.

Speaker #7: Thanks very much. Good morning, everyone. I want to make sure I want to make sure I'm thinking about this the right way. So if you're talking about digital services, defense, insurance, and even putting energy out there, as we look out over the next five years, if I'm doing the math right, the financial contribution is going to probably be at or above that you're currently getting from June financial.

Speaker #1: Over that time period. So that's why we classified this as potentially more of a 27 and beyond tailwind than anything material this year, even though the trucks will start to hit the showrooms at the end of the year.

Speaker #6: That's very helpful. Great. Thank you.

Itay Michaeli: That's very helpful. Great. Thank you.

Speaker #1: Yep. Thanks, Itai.

Paul Jacobson: Yeah. Thanks, Itay.

Speaker #2: Thank you. The next question comes from Mike Ward with Citigroup. Your line is open.

Operator: Thank you. The next question comes from Michael Ward with Citi. Your line is open.

Operator: Thank you. The next question comes from Mike Ward with Citigroup. Your line is open.

Speaker #7: Is that the right ballpark?

Speaker #7: Thanks very much. Good morning, everyone. I want to make sure. I want to make sure I'm thinking about this the right way. So if you're talking about digital services, defense, insurance, and even putting energy out there, as we look out over the next five years, if I'm doing the math right, the financial contribution is going to probably be at or above that you're currently getting from June financial.

Michael Ward: Thanks very much. Good morning, everyone.

Mike Ward: Thanks very much. Good morning, everyone.

Paul Jacobson: Good morning.

Speaker #2: Yeah. I mean, it's certainly not going to give anything specific going forward. But we see the growth trajectory that we're on. And where we are.

Paul Jacobson: I want to make sure I'm thinking about this the right way. If you're talking about digital services, defense, insurance, and even putting energy out there, as we look out over the next five years, if I'm doing the math right, the financial contribution is going to probably be at or above that you're currently getting from GM Financial. Is that the right ballpark?

Mike Ward: I want to make sure I'm thinking about this the right way. If you're talking about digital services, defense, insurance, and even putting energy out there, as we look out over the next five years, if I'm doing the math right, the financial contribution is going to probably be at or above that you're currently getting from GM Financial. Is that the right ballpark?

Speaker #2: And that's why it's so important that we're disclosing the deferred revenue piece. Because it does come in over a three to eight-year time period, depending on where the subscriptions are.

Speaker #2: And that revenue base is already over $3 billion. And as we've said, software-like margins. We've historically disclosed margins on OnStar of around 70%. So we're seeing really good traction there.

Speaker #7: Is that the right ballpark?

Paul Jacobson: Yeah. It's certainly not going to give anything specific going forward, we see the growth trajectory that we're on and where we are, that's why it's so important that we're disclosing the deferred revenue piece because it does come in over a three to eight year time period, depending on Subscriptions are, and that revenue base is already over $3 billion. As we've said, software-like margins. We've historically disclosed margins on OnStar of around 70%. We're seeing really good traction there. We expect that to continue to grow.

Speaker #1: Yeah. I mean, it's certainly not going to give anything specific going forward. But we see the growth trajectory that we're on. And where we are.

Speaker #2: And we expect that to continue to grow.

Speaker #1: And that's why it's so important that we're disclosing the deferred revenue piece, because it does come in over a three- to eight-year time period, depending on where the subscriptions are.

Speaker #4: Yeah. Mike, I'm really glad you asked the question. Because what we're trying to convey is we do think we have tremendous levers, multiple levers of growth.

Speaker #1: And that revenue base is already over $3 billion and as we've said, software-like margins. We've historically disclosed margins on OnStar of around 70%. So we're seeing really good traction there.

Speaker #4: Whether it's our software business, whether it's GM Defense, GM Insurance. They're small now. But when you ask a question over a five-year horizon, we definitely think there's a lot of opportunity at GM to grow, improve margins, and become less cyclical.

Speaker #1: And we expect that to continue to grow.

Speaker #4: So thanks for that question.

Speaker #7: And especially on the margin and the cash side. On a relative base to auto. Just that the revenue is not it's hard to make a dent in it.

Speaker #4: Yeah, Mike, I'm really glad you asked the question, because what we're trying to convey is we do think we have tremendous levers—multiple levers—of growth, whether it's our software business, whether it's GM Defense, or GM Insurance.

Mary Barra: Yeah, Mike, I'm really glad you asked the question because what we're trying to convey is we do think we have tremendous levers, multiple levers of growth, whether it's our software business, whether it's GM Defense, GM Insurance. They're small now, but when you ask a question over a five-year horizon, we definitely think there's a lot of opportunity at GM to grow, improve margins, and become less cyclical. Thanks for that question.

Speaker #7: But it's bigger. So and I think, Paul, you kind of alluded to your software-enabled vehicles. And I think a number I've heard is 30 to 40 million vehicles that have basically OnStar within them.

Speaker #4: They're small now, but when you ask a question over a five-year horizon, we definitely think there's a lot of opportunity at GM to grow, improve margins, and become less cyclical.

Speaker #7: First of all, is that the right number? And then second of all, how hard is it if you have a compelling product, how hard is it to turn them on?

Speaker #4: So thanks for that question.

Speaker #7: And especially on the margin and the cash side. On a relative base to auto, just the revenue is not it's hard to make a dent in it, but it's bigger.

Michael Ward: Especially on the margin in the cash side on a relative base to auto, just the revenue's not, it's hard to make a dent in it, but it's bigger. I think, Paul, you kind of alluded to your software-enabled vehicles, and I think a number I've heard is 30 to 40 million vehicles that have basically OnStar within them. First of all, is that the right number? Second of all, how hard is it, if you have a compelling product, how hard is it to turn them on if they wanted to join the subscription to get global Wi-Fi service? How hard is it to do that?

Mike Ward: Especially on the margin in the cash side on a relative base to auto, just the revenue's not, it's hard to make a dent in it, but it's bigger. I think, Paul, you kind of alluded to your software-enabled vehicles, and I think a number I've heard is 30 to 40 million vehicles that have basically OnStar within them. First of all, is that the right number? Second of all, how hard is it, if you have a compelling product, how hard is it to turn them on if they wanted to join the subscription to get global Wi-Fi service? How hard is it to do that?

Speaker #7: If they wanted to join the subscription together, whatever, to get global Wi-Fi service? How hard is it to do that?

Speaker #7: So, and I think, Paul, you kind of alluded to your software-enabled vehicles. And I think a number I've heard is 30 to 40 million vehicles that have basically OnStar within them.

Speaker #2: Do you want to take it, Michael?

Speaker #4: I was going to say it depends on the generation. Because there's several generations of technology. But I think from a current point, we have about 22 million that just got, for instance, an OTA update for Gemini.

Speaker #7: First of all, is that the right number? And then second of all, how hard is it if you have a compelling product, how hard is it to turn them on if they wanted to join the subscription together, whatever, to get global Wi-Fi service?

Speaker #4: So there is an opportunity of in the multiple millions, for us to continue to update depending on what the feature is and what we're doing, what the hardware is in the vehicle.

Speaker #7: How hard is it to do that?

Speaker #4: But it's pretty substantial to your point.

Speaker #1: You want to take a minute?

Paul Jacobson: You want to take it, Mary?

Speaker #4: I was going to say it depends on the generation because there's several generations of technology. But I think from a current point, we have about 22 million that just got, for instance, an OTA update for Gemini.

Mary Barra: I was going to say, it depends on the generation, because there's several generations of technology. I think from a current point, we have about 22 million that just got, for instance, an OTA update for Gemini. There is an opportunity of, in the multiple millions for us to continue to update depending on what the feature is and what we're doing, what the hardware is in the vehicle. It's pretty substantial to your point.

Speaker #7: It is. And do I understand it right? You said the new trucks would have Super Cruise?

Speaker #4: More models. Virtually all the models have it. I think there's just an exception of a work truck, etc. So we're really we believe in the technology.

Speaker #4: So there is an opportunity of in the multiple millions for us to continue to update depending on what the feature is and what we're doing, what the hardware is in the vehicle.

Speaker #4: We're seeing the customer interest. And remember, there was a conversation earlier about the overall cost. But usually that's in a trim package. And when people buy that, they're getting multiple years of service depending on which feature.

Speaker #4: But it's pretty substantial to your point.

Speaker #7: And do I understand it right? You said the new trucks would have Super Cruise?

Michael Ward: Did I understand it right, you said that new trucks would have Super Cruise?

Mike Ward: Did I understand it right, you said that new trucks would have Super Cruise?

Speaker #4: So we think it's actually providing a lot of value to the customers. The attach rate is good afterward. And yes, it will be on more of a full-size light-duty pickups as we launch.

Speaker #4: More models virtually all the models have it. I think there's just an exception of a work truck, etc. So we're really we believe in the technology.

Mary Barra: More models. Virtually all the models have it. I think there's just an exception of a work truck, et cetera.

Michael Ward: Right

Mike Ward: Right

Mary Barra: We believe in the technology. We're seeing the customer interest. Remember, there was a conversation earlier about the overall cost, but usually that's in a trim package. When people buy that, they're getting multiple years of service depending on which feature. We think it's actually providing a lot of value to the customers. The attach rate is good afterward. Yes, it will be on more of the full size, light duty pickups as we launch.

Speaker #7: Thank you very much. Really appreciate it.

Speaker #4: We're seeing the customer interest. And remember, there was a conversation earlier about the overall cost, but usually that's in a trim package. And when people buy that, they're getting multiple years of service, depending on which feature.

Speaker #2: Thanks, Mike.

Speaker #1: Thank you. The next question comes from Emmanuel Rosner with Wolf Research. Your line is open.

Speaker #5: Great. Thank you so much. What's helping to follow up on the earnings opportunity for the new trucks? I understand you flagged the strengths in pricing power.

Speaker #4: So we think it's actually providing a lot of value to the customers, the attach rate is good afterward. And yes, it will be on more of a full-size light-duty pickups as we launch.

Speaker #7: Thank you very much. Really appreciate it.

Speaker #5: Is there also a volume opportunity as you move into 2027, reflecting the fact that you have fairly lean inventories now? You're going to be lapping some of the changeover impact and downtime that you flagged in the fourth quarter.

Michael Ward: Thank you very much. Really appreciate it.

Mike Ward: Thank you very much. Really appreciate it.

Speaker #1: Thanks, Mike.

Paul Jacobson: Thanks, Mike.

Speaker #2: Thank you. The next question comes from Emmanuel Rosner with Wolf Research. Your line is open.

Operator: Thank you. The next question comes from Emmanuel Rosner with Wolfe Research. Your line is open.

Emmanuel Rosner: Great. Thank you so much. Was hoping to follow up on the earnings opportunity for the new truck. I understand you flagged the strength in pricing power. Is there also a volume opportunity as you move into 2027 reflecting the fact that you have fairly lean inventories now, you're going to be lapping some of the changeover impact and downtime that you flagged during Q4, some limited also in Q1. Just how to think about volume in H2 and into next year.

Speaker #5: Great. Thank you so much. What's helping to follow up on the earnings opportunity for the new truck? I understand you flagged the strengths and pricing power.

Speaker #5: Some limited also in the first quarter. So just how do you think about volume in the second half and into next year?

Speaker #4: So Emmanuel, the way you need to think about it is we start the launch at the very end of this year. And it goes into next year.

Speaker #4: But we also have three engine plants launching as well with new engines that support this truck. And provide a lot of benefit from a customer perspective.

Speaker #4: We're going to sell this year. We're going to be at record levels from a sale perspective. And we're saying we're going to carry that over to next year.

Speaker #5: So just how do you think about volume in the second half and into next year?

Speaker #4: The real volume opportunity comes in the very late 2027 or more in the 2028 time frame, when all of the engine plants are launched.

Mary Barra: Emmanuel, the way you need to think about it is, we start the launch at the very end of this year, and it goes into next year. We also have three engine plants launching as well with new engines that support this truck and provide a lot of benefit from a customer perspective. We're going to sell this year, we're going to be at record levels, from a sales perspective, and we're saying we're going to carry that over to next year. The real volume opportunity comes in the very late 2027 or more in the 2028 timeframe, when all of the engine plants are launched, and then we have Orion capability as well. That's where the growth from a volume perspective is really in 2028.

Speaker #4: So Emmanuel, the way you need to think about it is we start the launch at the very end of this year. And it goes into next year.

Speaker #4: But we also have three engine plants launching as well with new engines that support this truck. And provide a lot of benefit from a customer perspective.

Speaker #4: And then we have a Orient capability as well. So that's where the growth from a volume perspective, it's really in 2028.

Speaker #5: Okay. That's very clear. And then I appreciate all the good color around initial thoughts on 2027. Now, a lot of the key drivers that you highlighted, actually all of them are tailwinds all positive.

Speaker #4: We're going to sell this year. We're going to be at record levels from a sale perspective. And we're saying we're going to carry that over to next year.

Speaker #4: The real volume opportunity comes in the very late '27 or more in the '28 timeframe when all of the engine plants are launched. And then we have a oriented capability as well.

Speaker #5: Would you be willing also to speak about more broadly, sort of like puts and takes, are there any headwinds we should consider such as commodities or further deram inflation, just for more holistic view of the 2027 picture?

Speaker #4: So that's where the growth from a volume perspective, it's really in '28.

Speaker #5: Okay, that's very clear. And I appreciate all the good color around initial thoughts on 2027. Now, a lot of the key drivers that you highlighted—actually all of them—are tailwinds, all positive.

Emmanuel Rosner: Okay, that's very clear. I appreciate all the good color around initial thoughts on 2027. A lot of the key drivers that you highlighted, actually all of them are tailwinds, all positive. Would you be willing also to speak about more broadly sort of like puts and takes? Are there any headwinds we should consider, such as commodities or further DRAM inflation, just for a more holistic view of the 2027 picture?

Speaker #2: Yeah. Emmanuel, we haven't obviously quantified any of that. But we're going to see some inflationary pressures in the business. I mean, I think that's just to be expected across the board.

Speaker #5: Would you be willing also to speak about more broadly, sort of like puts and takes, are there any headwinds we should consider such as commodities or further DRAM inflation, just for a more holistic view of the 2027 picture?

Speaker #2: So what we're really trying to do now is essentially say that many of the things that are allowing us to expand our margins in 2026 are warranty, EV profitability, digital revenue growth.

Speaker #1: Yeah. Emmanuel, we haven't, obviously, quantified any of that, but we're going to see some inflationary pressures in the business. I mean, I think that's just to be expected across the board.

Speaker #2: And it's not just about 2027, as we've said in a few public presentations across the board. So that momentum's there. I think the question is, how much of that incremental tailwind can we capture based on what's out there in the macro?

Paul Jacobson: Yeah. Emmanuel, we haven't obviously quantified any of that, we're going to see some inflationary pressures in the business. I mean, I think that's just to be expected across the board. What we're really trying to do now is essentially say that many of the things that are allowing us to expand our margins in 2026 are multi-year trajectories, whether it be warranty, EV profitability, digital revenue growth. It's not just about 2027, as we've said in a few public presentations across the board. That momentum's there. I think the question is how much of that incremental tailwind can we capture based on what's out there in the macro. What we're trying to really project is we're continuing to drive this execution across the board.

Speaker #1: So, what we're really trying to do now is essentially say that many of the things that are allowing us to expand our margins in 2026 are multi-year trajectories, whether it be warranty, EV profitability, or digital revenue growth.

Speaker #2: But what we're trying to really project is we're continuing to drive this execution across the board. We're preparing in advance for where the headwinds have.

Speaker #1: And it's not just about ’27, as we've said in a few public presentations across the board. So that momentum's there. I think the question is, how much of that incremental tailwind can we capture based on what's out there in the macro?

Speaker #2: And we still believe that we've got a good trajectory of continued margin expansion and continued EBIT growth. And share buybacks into the future.

Speaker #5: Understood. Thank you.

Speaker #1: But what we're trying to really project is we're continuing to drive this execution across the board. We're preparing in advance for where the headwinds have.

Speaker #1: Thank you. Our next question comes from Tom Narayan with RBC. Your line is open.

Paul Jacobson: We're preparing in advance for where the headwinds have, we still believe that we've got a good trajectory of continued margin expansion and continued EBIT growth and share buybacks into the future.

Speaker #6: Hi. Thanks for taking the questions. So I appreciate the commentary on the US onshoring. Just curious how that would do with the current proposal that we're seeing out there on the 50% US contenting.

Speaker #1: And we still believe that we've got a good trajectory of continued margin expansion and continue EBIT growth and share buybacks into the future.

Speaker #5: Understood. Thank you.

Emmanuel Rosner: Understood. Thank you.

Speaker #2: Thank you. Our next question comes from Tom Narayan with RBC. Your line is open.

Speaker #6: As it relates to either USMCA or a bilateral deal. That may happen. Is the onshoring that you guys have already underway enough to comply with something like that, with the 50% US contenting?

Operator: Thank you. Our next question comes from Tom Narayan with RBC. Your line is open.

Tom Narayan: Hi, thanks for taking the questions. I appreciate the commentary on the US onshoring. Just curious how that would do with the current proposal that we're seeing out there on the 50% US contenting as it relates to either USMCA or a bilateral deal that may happen. Is the onshoring that you guys have already underway enough to comply with something like that, with the 50% US contenting, or would that require some additional onshoring beyond what you're contemplating?

Speaker #6: Or would that require some additional onshoring beyond what you're contemplating?

Speaker #4: Well, we've already done quite a bit of work, I would say. That's something we started after the semiconductor shortage and COVID. Recognizing that the global supply chain needed to be much more resilient.

Speaker #6: As it relates to either USMCA or a bilateral deal, that may happen. Is the onshoring that you guys already have underway enough to comply with something like that, with the 50% U.S. content, or would that require some additional onshoring beyond what you're contemplating?

Speaker #4: So I would say General Motors has done a fair amount of this. And we're also working with our suppliers and have been now that we're in the tariff environment.

Speaker #4: I think when you look at the different rates, there's productive conversations going on between the US and Mexico. I'm hoping for we can get through some of the back and forth that's happening between the US and Canada.

Speaker #4: Well, we've already done quite a bit of work, I would say. That's something we started after the semiconductor shortage and COVID, recognizing that the global supply chain needed to be much more resilient.

Mary Barra: Well, we've already done quite a bit of work. I would say that's something we started after the semiconductor shortage in COVID, recognizing that the global supply chain needed to be much more resilient. I would say General Motors has done a fair amount of this, and we're also working with our suppliers and have been now that we're in the tariff environment. I think when you look at the different rates, there's productive conversations going on between the US and Mexico. I'm hoping for we can get through some of the back and forth that's happening between the US and Canada.

Speaker #4: But I do feel that there's a commitment both from the administration and from a congressional perspective that we want to make sure we have a strong manufacturing base, which is making sure that the US automakers are going to be able to compete and win when we look at what the tariff rates are for Europeans.

Speaker #4: So I would say General Motors has done a fair amount of this. And we're also working with our suppliers and have been now that we're in the tariff environment.

Speaker #4: I think when you look at the different rates, there are productive conversations going on between the US and Mexico. I'm hoping we can get through some of the back and forth that's happening between the US and Canada, but I do feel that there's a commitment both from the administration and from a congressional perspective that we want to make sure we have a strong manufacturing base, which is making sure that the US automakers are going to be able to compete and win when we look at what the tariff rates are for Europeans, the Japanese, and the Koreans.

Speaker #4: The Japanese and the Koreans. So I think there's a good understanding of that. We're providing a lot of input to make sure that they understand the consequences.

Mary Barra: I do feel that there's a commitment, both from the administration and from a congressional perspective, that we want to make sure we have a strong manufacturing base, which is making sure that the US automakers are going to be able to compete and win, when we look at what the tariff rates are for Europeans, the Japanese, and the Koreans. I think there's a good understanding of that. We're providing a lot of input to make sure that they understand the consequences. We need a strong North America, as Paul had said earlier in the day. We need all the countries to work together, and we need an overall rate that allows us to be competitive, so we can win and continue to invest in US manufacturing.

Speaker #4: And we need a strong North America. Paul has said earlier in the day, we need all the countries to work together. And we need an overall rate that allows us to be competitive so we can win and continue to invest in US manufacturing.

Speaker #6: Okay. And then follow-up to the commentary on Super Cruise. It seems like pricing is coming in, especially in North America. We're seeing that from other automakers with autonomy offerings.

Speaker #4: So I think there's a good understanding of that. We're providing a lot of input to make sure that they understand the consequences. And we need a strong North America as Paul has said earlier in the day.

Speaker #4: We need all the countries to work together, and we need an overall rate that allows us to be competitive so we can win and continue to invest in U.S. manufacturing.

Speaker #6: Level two plus plus. But then you look at China. It's a completely different story. Just curious how you think about long-term autonomy pricing? It seems to be deflationary in China.

Speaker #6: Okay. And then, a follow-up to the commentary on Super Cruise—it seems like pricing is coming in, especially in North America. We're seeing that from other automakers with autonomy offerings.

Tom Narayan: Okay. Following to the commentary on Super Cruise, it seems like the pricing is coming in, especially in North America. We're seeing that from other automakers with autonomy offerings, level 2++. You look at China, and it's a completely different story. Just curious how you think about long-term autonomy pricing. It seems to be deflationary in China. Maybe it's a completely different consumer dynamic in the US, but I know this is a very high-level question, but just curious how you think about how autonomy pricing for private mobility could develop. Thanks.

Speaker #6: Maybe it's a completely different consumer dynamic in the US. But I know this is a very high-level question. But just curious how you think about how autonomy pricing for private mobility could develop.

Speaker #6: Level two plus-plus. But then you look at China. It's a completely different story. Just curious how you think about long-term autonomy pricing? It seems to be deflationary in China.

Speaker #6: Thanks.

Speaker #4: Well, I think first of all, you've got to look at China. There's intense pricing competition that frankly is unsustainable. And China is in-country solutions.

Speaker #6: Maybe it's a completely different consumer dynamic in the U.S., but I know this is a very high-level question. I'm just curious how you think about how autonomy pricing for private mobility could develop.

Speaker #4: For the vehicles, we have moment on our vehicles. I think we're in a leadership position or among the leaders with the technology that we're providing and we're going to continue to do that.

Speaker #4: But I think you've got to look at what's really sustainable with the overall what's happening in that market right now is there's so many competitors.

Speaker #6: Thanks.

Speaker #4: Well, I think first of all, you got to look at China. There's intense pricing competition that frankly is unsustainable. And China is in-country solutions.

Mary Barra: Well, I think first of all, you got to look at China. There's intense pricing competition that frankly is unsustainable in China's in-country solutions for the vehicles. We have momentum on our vehicles. I think we're in a leadership position or among the leaders with the technology that we're providing, and we're going to continue to do that. I think you've got to look at what's really sustainable with the overall what's happening in that market right now, is there's so many competitors. There's a lot of sorting that's going to need to happen for long-term viability. I think from this country, we believe that autonomy is going to be extremely important on our vehicles, and I do believe there'll be pricing power, and we'll also continue to work to get the cost down.

Speaker #4: There's a lot of sorting that's going to happen. Need to happen for long-term viability. I think from this country, we believe that autonomy is going to be extremely important on our vehicles.

Speaker #4: For the vehicles, we have momentum on our vehicles. I think we're in a leadership position or among the leaders with the technology that we're providing and we're going to continue to do that.

Speaker #4: And I do believe there'll be pricing power. And we'll also continue to work to get the cost down. Super Cruise is a great example of where that product started versus what it is now and why we're able to offer it and continuing to offer it more and more vehicles.

Speaker #4: But I think you've got to look at what's really sustainable with the overall what's happening in that market right now is there's so many competitors.

Speaker #4: Paul talked about the fact as we continue to drive cost efficiencies in the technology. It just enables us to provide it to more consumers.

Speaker #4: But I do value of it. And there's they are willing to pay. And I think before this becomes something that is just standard on every vehicle, there's a long time between now and then because we sell the long way to go from full autonomy where a vehicle can go anywhere at any time.

Mary Barra: Super Cruise is a great example of where that product started versus what it is now and why we're able to offer it and continuing to offer it in more and more vehicles. Paul talked about the fact, as we continue to drive cost efficiencies in the technology, it just enables us to provide it to more consumers. I do think customers recognize the value of it, and they are willing to pay. I think before this becomes something that is just standard on every vehicle, there's a long time between now and then because we still have a long way to go from full autonomy, where a vehicle can go anywhere, anytime. A lot of what we're seeing now, and there's been great progress made, although it's taken longer, is you still are in certain regions, geo-fenced, et cetera.

Speaker #4: Paul talked about the fact as we continue to drive cost efficiencies in the technology. It just enables us to provide it to more consumers.

Speaker #4: A lot of what we're seeing now, and there's been great progress made, although it's taken longer, is you still are in certain regions geofenced, etc.

Speaker #4: But I do think customers recognize the value of it. And there's they are willing to pay. And I think before this becomes something that is just standard on every vehicle, there's a long time between now and then because we sell the long way to go from full autonomy where a vehicle can go anywhere at any time.

Speaker #4: So I think there's a this is an incredibly important technology that we have on our vehicles. I think there's an opportunity to drive value for a long period of time.

Speaker #4: And we'll see how the market plays out.

Speaker #6: Great. Thanks a lot.

Speaker #4: A lot of what we're seeing now—and there has been great progress made, although it's taken longer—is you still are, in certain regions, geofenced, etc.

Speaker #1: Thank you. Our next question comes from Mark Delaney with Goldman Sachs. Your line is open.

Speaker #4: So I think this is an incredibly important technology that we have on our vehicles. I think there's an opportunity to drive value for a long period of time.

Speaker #5: Yes. Good morning. Thank you very much for taking the questions. Is there more color you can share on the memory supply agreement and what that means for cost and availability going forward, including to what extent it gives GM a clear view on what memory costs are going to be in 2027?

Mary Barra: I think this is an incredibly important technology that we have on our vehicles. I think there's an opportunity to derive value for a long period of time, and we'll see how the market plays out.

Speaker #4: And we'll see how the market plays out.

Speaker #6: Great. Thanks a lot.

Tom Narayan: Great. Thanks a lot.

Speaker #4: Well, we're very pleased that we have a strong relationship with Micron. And we also have one with Samsung as well. And these are strategic engagements and long-term engagements that go back to 2022.

Operator: Thank you. Our next question comes from Mark Delaney with Goldman Sachs. Your line is open.

Speaker #2: Thank you. Our next question comes from Mark Delaney with Goldman Sachs. Your line is open.

Mark Delaney: Yes, good morning. Thank you very much for taking the questions. Is there more color you can share on the memory supply agreement and what that means for cost and availability going forward, including to what extent it gives GM a clear view on what memory costs are going to be in 2027?

Speaker #4: As I mentioned, as we went through the semiconductor shortage and the chip shortage, we really worked to make sure that we've got direct relationships and stable supply.

Speaker #4: And I think the relationships we've built are providing value to us for sure as we move forward. We haven't disclosed specific pricing, but I think we've got a good relationship with both suppliers.

Mary Barra: Well, we're very pleased that we have a strong relationship with Micron, and we also have one with Samsung as well, and these are strategic engagements and long-term engagements that go back to 2022. As I mentioned, as we went through the semiconductor shortage and the chip shortage, we really worked to make sure that we've got direct relationships and stable supply. I think the relationships we've built are providing value to us for sure as we move forward. We haven't disclosed specific pricing, but I think we've got a good relationship with both suppliers, and we're going to continue to work with them and align on next-generation memory technology so we can have jointly developed technology roadmaps that I think will enable us to not only enable future product innovation, but also performance improvements as we go forward.

Speaker #4: And we're going to continue to work with them and align on next-generation memory technology so we can have jointly developed technology roadmaps. But I think we'll enable us to not only enable future product innovation, but also performance improvements as we go forward.

Speaker #4: As we went through the semiconductor shortage and the chip shortage, we really worked to make sure that we've got direct relationships and stable supply.

Speaker #4: So I think we've got I think we've got the right line of sight with the strategic partnerships we have and we're going to continue to build on those.

Speaker #4: And we're going to continue to work with them and align on next-generation memory technology so we can have jointly developed technology roadmaps. I think that will enable us to not only drive future product innovation, but also achieve performance improvements as we go forward.

Speaker #5: That's helpful. Thanks. My other question was on fleet. It's been very strong, as you mentioned, in the prepared remarks. Why does GM think the fleet business has been so strong?

Speaker #5: And what's your view on the ability to sustain that? Thank you.

Speaker #2: I think the team's done a really good job here, Mark. And it really goes to the quality of the portfolio and the services that we can offer.

Speaker #4: So I think we've got I think we've got the right line of sight with the strategic partnerships we have, and we're going to continue to build on those.

Mary Barra: I think we've got the right line of sight with the strategic partnerships we have, and we're going to continue to build on those.

Speaker #2: Across the board. So when we look at the relations that we have with our fleet customers, and that's across the board, whether it's rental or it's government or it's commercial, I think those go a long way.

Speaker #5: That's helpful, thanks. My other question was on fleet. It's been very strong, as you mentioned in the prepared remarks. Why does GM think the fleet business has been so strong?

Mark Delaney: That's helpful. Thanks. My other question was on fleet. It's been very strong, as you mentioned in the prepared remarks. Why does GM think the fleet business has been so strong, and what's your view on the ability to sustain that? Thank you.

Speaker #5: And what's your view on the ability to sustain that? Thank you.

Speaker #2: And they really respond to the products that we have. So I think the difference is fleet historically, I think, was a an outlet for excess capacity.

Speaker #3: I think the team's done a really good job here, Mark. And it really goes to the quality of the portfolio and the services that we can offer.

Paul Jacobson: I think the team's done a really good job here, Mark, and it really goes to the quality of the portfolio and the services that we can offer across the board. When we look at the relations that we have with our fleet customers, and that's across the board, whether it's rental or it's government or it's commercial, I think those go a long way, and they really respond to the products that we have. I think the difference is fleet historically, I think was an outlet for excess capacity. That's really changed today. We very consciously allocate between retail and fleet and where we can. We don't sacrifice value when we're doing that. We're looking to balance the enterprise as a whole rather than historically where we would just offer pretty significant discounts on the fleet side.

Speaker #3: Across the board. So when we look at the relations that we have with our fleet customers, and that's across the board, whether it's rental or it's government or it's commercial, I think those go a long way.

Speaker #2: That's really changed. Today, we very consciously allocate between retail and fleet and where we can. But we don't sacrifice value when we're doing that.

Speaker #2: So we're looking to balance the enterprise as a whole, rather than historically where we would just offer pretty significant discounts in the fleet side.

Speaker #3: And they really respond to the products that we have. So I think the difference is fleet historically, I think, was a an outlet for excess capacity.

Speaker #2: That's not the way it's working anymore. And it really depends on those relationships.

Speaker #3: That's really changed. Today, we very consciously allocate between retail and fleet and where we can. But we don't sacrifice value when we're doing that.

Speaker #5: Thank you.

Speaker #1: Thank you. The last question comes from the line of Rajat Gupta with JP Morgan. Your line is open.

Speaker #3: So we're looking to balance the enterprise as a whole, rather than historically where we would just offer pretty significant discounts in the fleet side.

Speaker #3: Well, great. Thanks for taking the question. I just wanted to get an update on autonomy and the 2028 ISOF handoff launch. Any update on the progress there?

Speaker #3: It's not the way it's working anymore, and it really depends on those relationships.

Paul Jacobson: That's not the way it's working anymore, and it really depends on those relationships.

Speaker #3: Maybe any change in how you're approaching it on the tech side, architecture side? Would be helpful and have a quick follow-up.

Speaker #5: Thank you.

Mark Delaney: Thank you.

Speaker #2: Thank you. The last question comes from the line of Raja Gupta with JP Morgan. Your line is open.

Operator: Thank you. The last question comes from the line of Raja Gupta with JP Morgan. Your line is open.

Operator: Thank you. The last question comes from the line of Rajat Gupta with JPMorgan. Your line is open.

Speaker #4: No. There's no change. I would say the program overall is on track. It's got an aggressive execution plan, but they're meeting their largely meeting their milestones.

Speaker #6: Well, great. Thanks for taking the question. I just wanted to get an update on autonomy and the 2028 ISOF handoff launch. Any update on the progress there?

Raja Gupta: Well, great. Thanks for taking the question. Just wanted to get an update on autonomy and the 2028 eyes-off, hands-off launch. Any update on the progress there? Maybe any change in how you're approaching it on the tech side, architecture side would be helpful. I have a quick follow-up.

Rajat Gupta: Well, great. Thanks for taking the question. Just wanted to get an update on autonomy and the 2028 eyes-off, hands-off launch. Any update on the progress there? Maybe any change in how you're approaching it on the tech side, architecture side would be helpful. I have a quick follow-up.

Speaker #4: I'm very excited about it. I think I mentioned in last quarter earnings, I had a chance to be in the vehicle and they're making great progress.

Speaker #4: So excited about what's coming and we're going to continue to move forward aggressively to make sure we deliver a system that not only provides the autonomy, but also lives up to the standard of safety that General Motors has held ourselves to across our vehicle portfolio and also when you look at what we've been able to do with Super Cruise.

Speaker #6: Maybe any change in how you're approaching it on the tech side, architecture side, would be helpful and have a quick follow-up.

Mary Barra: No, there's no change. I would say the program overall is on track. It's got an aggressive execution plan, but they're largely meeting their milestones. I'm very excited about it. I think I mentioned in last quarter's earnings, I had a chance to be in the vehicle, and they're making great progress. Excited about what's coming, and we're going to continue to move forward aggressively to make sure we deliver a system that not only provides the autonomy but also lives up to the standard of safety that General Motors has held ourselves to across our vehicle portfolio, and also when you look at what we've been able to do with Super Cruise.

Speaker #4: No, there's no change. I would say the program overall is on track. It's got an aggressive execution plan, but they're largely meeting their milestones.

Speaker #4: I'm very excited about it. I think I mentioned in last quarter earnings, I had a chance to be in the vehicle and they're making great progress.

Speaker #3: Honestly, that's helpful. And just to follow up on Emmanuel's question around the '27 bridge, the one to one and a half billion onshoring investments this year, should we think about that as in the base?

Speaker #3: Are there any one-time items from that that maybe do not repeat next year that we should consider? And maybe in terms of additional investments, are there anything are there any other investments we should consider with respect to maybe autonomy, related to R&D?

Speaker #6: Honestly, that's helpful. And just to follow up on Emmanuel's question, around the 27 bridge, the one to one and a half billion onshoring investments this year, should we think about that as in the base?

Raja Gupta: Honestly, that's helpful. Just to follow up on Emmanuel's question around the 2027 bridge. The $1 to $1.5 billion onshoring investments this year, should we think about that as like in the base? Are there any one-time items from that that maybe do not repeat next year that we should consider? Maybe, in terms of additional investments, are there any other investments we should consider with respect to maybe autonomy, raised R&D, cloud capacity, et cetera? Thanks.

Rajat Gupta: Honestly, that's helpful. Just to follow up on Emmanuel's question around the 2027 bridge. The $1 to $1.5 billion onshoring investments this year, should we think about that as like in the base? Are there any one-time items from that that maybe do not repeat next year that we should consider? Maybe, in terms of additional investments, are there any other investments we should consider with respect to maybe autonomy, raised R&D, cloud capacity, et cetera? Thanks.

Speaker #3: Capacity, cloud capacity, etc. Thanks.

Speaker #2: Yeah. So I would say that the bulk of the setup costs are recurring and ongoing costs. So we're hiring and training individuals to the biggest drag is probably as we hire them before we get production, in place.

Speaker #6: Are there any one-time items from that that maybe do not repeat next year that we should consider? And maybe in terms of additional investments, are there anything are there any other investments we should consider with respect to maybe autonomy, related R&D, capacity, cloud capacity, etc.?

Speaker #2: So that's where you're seeing a little bit of the margin friction. As far as the cost line goes, you'll have a lapping of the additional heads in 2027, but that will be offset by actual production as we start to normalize and ramp up where we are.

Speaker #6: Thanks.

Speaker #3: Yeah. So I would say that the bulk of the setup costs are recurring and ongoing costs. So we're hiring and training individuals to the biggest drag is probably as we hire them before we get production, in place.

Paul Jacobson: Yeah. I would say that the bulk of the setup costs are recurring and ongoing costs. We're hiring and training individuals. The biggest drag is probably as we hire them before we get production in place. That's where you're seeing a little bit of the margin friction. As far as the cost line goes, you'll have a lapping of the additional heads in 2027. That will be offset by actual production as we start to normalize and ramp up.

Speaker #2: So overall, I would say it's a little bit balanced into 2027, but as we continue to see how we ramp up production that'll affect the ultimate magnitude.

Speaker #3: So that's where you're seeing a little bit of the margin friction. As far as the cost line goes, you'll have a lapping of the additional heads in 2027, but that will be offset by actual production as we start to normalize and ramp up where we are.

Speaker #3: Honestly, and just to clarify, there's no additional expense or investment related to autonomy or R&D that we should anticipate next year, correct?

Speaker #2: No. I think we've seen that inflation. It'll baseline. Again, we've got some of that second half loaded, so there'll be a lapping effect in '27.

Speaker #3: So overall, I would say it's a little bit balanced into 2027, but as we continue to see how we ramp up production that'll affect the ultimate magnitude.

Speaker #2: But we're not expecting significant additional investment.

Speaker #3: Understood. Thanks for all the color and good luck.

Speaker #6: Obviously. And just to clarify, there's no additional expense or investment related to autonomy or R&D that we should anticipate next year, correct?

Speaker #2: Yeah. Thank you.

Speaker #4: Thank you.

Speaker #1: Thank you. I'd like to turn the call over to Mary Barra for her closing comments.

Speaker #3: No. I think we've seen that inflation. It'll baseline. Again, we've got some of that second half loaded, so there'll be a lapping effect in 27.

Speaker #4: Well, thanks, everybody. I really appreciate all the questions today. And I know we've covered a lot of ground, so if we just step back, we want to leave you with the fact that our vehicle portfolio continues to get stronger.

Speaker #3: But we're not expecting significant additional investment.

Speaker #4: I'm very excited about the full-size truck launch that we have coming. We also are officially on showing significant manufacturing, which will reduce our tariff expense.

Speaker #6: Understood. Thanks for all the color, and good luck.

Speaker #3: Yeah. Thank you.

Speaker #4: Thank you.

Speaker #2: Thank you. I'd like to turn the call over to Mary Barra for her closing comments.

Speaker #4: Our software and services ecosystem is expanding, and that's not just for one year, but that's going to continue to expand over the next few years.

Speaker #4: Well, thanks, everybody. I really appreciate all the questions today. I know we've covered a lot of ground, so if we just step back, we want to leave you with the fact that our vehicle portfolio continues to get stronger.

Speaker #4: And beyond. And we have growth businesses like GM Defense and GM Insurance that are creating additional avenues for value creation and are not in the traditional cyclicality of the auto industry.

Speaker #4: I'm very excited about the full-size truck launch that we have coming. We also are officially on track, showing significant manufacturing, which will reduce our tariff expense.

Speaker #4: So all of this supports our commitment to ongoing margin expansion. I'm personally very excited about the growth opportunities that we have in the margin expansion opportunities that we have.

Speaker #4: Our software and services ecosystem is expanding, and that's not just for one year, but that's going to continue to expand over the next few years.

Speaker #4: We know there is more work ahead, but I believe we're building from a position of strength with a proven track record of execution. So with all of our momentum, we're confident in '26 and have said it will be stronger than '25.

Speaker #4: And more importantly, that '27 and the years beyond will be stronger still. So thank you very much for your time, and have a great day.

Speaker #4: We know there is more work ahead, but I believe we're building from a position of strength with a proven track record of execution. So with all of our momentum, we're confident in 26.

Speaker #4: And have said it will be stronger than 25 and more importantly, that 27 and the years beyond will be stronger still. So thank you very much for your time.

Speaker #4: And have a great day.

Q2 2026 General Motors Co Earnings Call

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