General Motors Company

Good morning and welcome to the General Motors Company second quarter 2024 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, July 23, 2024. I would now like to turn the conference over to Ashish Kohli, GM's Vice President of Investor Relations.

Thanks, Amanda, and good morning, everyone. We appreciate you joining us as we review GM's financial results for the second quarter of 2024. 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, and Paul Jacobson, GM's executive vice president and CFO. Dan Burrs, president and CEO of GM Financial, will also be joining us for the Q&A portion of the call. On today's call, management will make forward-looking statements about our expectations. These statements are subject to risks and uncertainties that could cause our 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 our call will be governed by this language. And with that, I'm delighted to turn the call over to Mary.

Thanks, Ashish, and good morning, everyone. I want to begin today's call by thanking the GM team as well as our dealers, suppliers, and other business partners for helping us deliver strong second quarter and first half results, including record revenue in both periods. There are four key drivers to our performance, and our new hire guidance that I'd like to highlight. First, our past investments have created a consistently high-performing portfolio of ICE trucks and SUVs from a volume, share, and margin standpoint. Next, our EV portfolio is scaling well and gaining market share. In fact, our U.S. EV deliveries grew 40% year-over-year in the second quarter, while the industry grew at 11%. We're encouraged by these early results because disciplined volume growth is key to earning positive variable profits from our EV portfolio in the fourth quarter and maintaining strong ICE margins. Third, we continue to deliver stable pricing, and our incentives on average have been more than 100 basis points below the industry average for four consecutive quarters. And finally, with our new investments, we have even greater focus on margins and capital efficiency. Great vehicles and better execution will continue to differentiate us. In the first half, Chevrolet Silverado and GMC Sierra Volumes in the U.S. were up a combined 5% versus a year ago, and we gained 3.5 points of market share with disciplined production and consistent pricing. In addition, sales of our redesigned Chevrolet Colorado and GMC Canyon midsize pickups were up 31% year-over-year, with ATPs up 9%. And SUVs were executing a full-court press with eight all-new redesigned compact, midsize, and full-size models, that began arriving in showrooms during the second quarter. They include some of our most profitable nameplates, like the Chevrolet Traverse, GMC Acadia, and the Buick Enclave, which will be available with Super Cruise for the first time. We designed Super Cruise to let customers drive hands-free for hours at a time on far more roads and with far fewer disengagements. Road testers at Edmunds.com rated Super Cruise the top hands-free driving system because it's confidence-inspiring. and its technical differences between our system and others explain why Super Cruise is so smooth. The Chevrolet Equinox, our highest volume SUV, will also be all new, and we expect it to be more profitable than the outgoing model, just like our family of midsize Buick, GMC, and Chevrolet SUVs. This is a function of several strategic decisions we've made. First, the styling is bolder and more truck-like for the Chevrolets and GMCs, while the Buick Enclave adopts the brand's sophisticated new design language. Next, we elevated the comfort and technology features to make them even more desirable. Then we leveraged our proven platforms and component sets for lower cost and greater efficiency. Winning with simplicity, which is our drive to eliminate unnecessary complexity in the way we engineer and equip our vehicles, will help ensure that we can continue to sustain and even improve our margins in the future. For example, through smarter contenting and optimizing selectable options, we have been able to eliminate more than 2,400 unique parts on 10 vehicles we're launching through the first quarter of 2025. On the 2025 Cadillac Lyric alone, we reduced the part count 24% from the 2024 model year with no compromises to performance or features. The list of parts or subsystems that we no longer need to design, engineer, source, install, and warehouse is extensive. and includes complex and relatively costly seat assemblies, consoles, door trims, and fascias. A crucial element is reducing the number of buildable electrical combinations, which is delivering hardware and software quality improvements as well as savings. The work is helping us meet our $2 billion fixed cost reduction program this year, and the savings will be even greater in the future. As I said before, our EV portfolio is growing faster than the market now that our module issues are resolved and we are scaling production. Our early sales are mostly incremental. About 54% of customers are new to GM, and we're working to increase our conquest rate by raising awareness and launching new models. Our best-selling EV so far this year is the Cadillac Lyric, and it is now the market-leading luxury EV in 22 states, including Florida, Texas, and Michigan. The GMC Hummer EV and the Chevrolet Blazer EV are also building momentum. To unleash the next cycle of EV growth, we're scaling production of the Chevrolet Equinox EV with its unique combination of performance, technology, range, and affordability. We delivered our first 1,000 units late in the second quarter, and the reaction from customers, dealers, and the media is very strong. One product reviewer said, Chevy seems positioned to grab a piece of the pie that no one else has quite grabbed onto yet, and we think that is spot on. Then over the next several months, GMC will launch the Sierra EV, and the Cadillac Lyric will be joined by the Optic, Escalade IQ, and Celestic. We're especially excited about the Optic. Car and Driver said it nails the compact luxury SUV formula. Then next year, when we follow with the Vistach, Cadillac will have a beautifully designed EV in every global luxury SUV segment. We're going to focus on winning new customers with these nameplates, as well as with the next generation Chevrolet Bolt EV, because they represent the largest growth opportunities for us. But we've also made adjustments to ensure we have a balanced approach as the market develops. This includes deferring Buick's first EV, which had been planned for 2024. As we're expanding choice, other barriers to EV adoption like public charging access are also improving. We are working to finalize commercial agreements with Tesla to give our customers access to their charging network. The Iona fast charging venture we joined is expected to bring its first chargers online before the end of the year, and customers are telling us the drive-thru plazas we're rolling out with Pilot Company are the best public charging experience out there. As excited as we are about our portfolio, we are committed to growing responsibly and profitably in any demand environment. Over the next few years, third-party forecasters now see the EV market growing steadily but more slowly than it did over the last few years. As a result, we are adjusting our spending plans to make sure we're capital efficient and moving in lockstep with customers. For example, our Altium Cells joint venture continues to ramp up domestic battery cell supply this year, which is helping drive profit improvement in our EV portfolio. As we go forward, we're going to bring additional capacity online in a measured cadence. This will enable us to better optimize our battery chemistry and form factors to meet our customers' needs on cost and range. We've also decided to reopen the Orion Assembly as a battery electric truck plant in mid-2026. The new timing is six months later than our plan heading into the year. We're confident that we can meet customer demand for standout EV trucks in the interim by leveraging the production capability and flexibility we have in Factory Zero. We will also continue to take advantage of the flexibility we have to mix production between ICE and EV at key plants. Next, I'd like to discuss our results in China. As you know, the market has significant excess capacity, and many startups and established competitors continue to prioritize production over profitability. We have been taking steps to reduce our inventories, align our production to demand, protect our pricing, and reduce fixed costs. But it's clear the steps we have taken, while significant, have not been enough. We had expected to return to profitability in China in the second quarter. However, we reported a loss, and we expect the rest of the year will remain challenging because the headwinds are not easing. We are working closely with our JV partner to restructure the business to make it profitable and sustainable. I'll close my opening comments by recognizing the progress Cruise has made over the last several months. As you know, Cruise has returned to the road in Houston, Phoenix, and Dallas, and we recently provided them with bridge financing to support their operational cash needs. We've also made several significant leadership appointments, including hiring Mark Witten as CEO. Mark has decades of experience on the front lines of technology transformations, which will be crucial as we move forward. Our vision to transform mobility using autonomous technology is unchanged, and every mile traveled and every simulation brings us closer because Cruise is an AI-first company. We have some of the best engineers in tech building a cutting-edge AI platform, harnessing the power of large-scale foundation models to continuously improve safe AV performance. The cruise team will also simplify their path to scale by focusing their next autonomous vehicle on the next generation Chevrolet Bolt EV instead of the Origin. It's a win-win for both GM and Cruise. It addresses the regulatory uncertainty we face with the Origin because of its unique design. Per unit costs will be much lower, which will help crews optimize resources and enable them to deliver AV tech at scale as quickly as possible. And the change will help GM fully leverage our investment in the Bolt EV with a major new customer for the product. We think all of these are important steps that will help us attract those who believe in the crew's mission and see the incredible long-term business opportunity of autonomous driving. With that, I will turn the call over to Paul to walk you through our financial results.