General Motors Company

Good morning and welcome to the General Motors Company second quarter 2025 earnings conference call. During the opening remarks, all participants will be in a listen-only mode. After the opening remarks, we will conduct a question and answer session. We are asking analysts to limit their questions to one in 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 22, 2025. I would now like to turn the call 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 2025. 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. Susan Sheffield, 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 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.

Thank you, Ashish, and good morning, everyone. Today we reported another quarter of earnings that highlights the core strengths of General Motors. They include the appeal of our vehicles, customer loyalty to our brands, the growing value of technologies like OnStar and Super Cruise, as well as the creativity and resiliency of our global team. I am grateful for everyone's contributions, our employees, our dealers, and our suppliers. In the U.S. and around the world, we have demonstrated consistent execution of our production and go-to-market strategies. We do have opportunities from a quality perspective at both the supplier and the GM level, which Paul will talk more about in his remarks. but we are fundamentally very strong and resilient. As we discussed today, we have delivered strong underlying operating performance and we are positioning the business for a profitable long-term future as we adapt to new trade and tax policies and a rapidly evolving tech landscape. Our clear priorities are to grow our already expansive U.S. manufacturing footprint and domestic supply chain, further strengthen our international business, and continue to innovate in batteries, software, and autonomous technology. In China, we have been working closely with our JV partner to improve sales, inventory management, cost, and profitability. The performance of our new energy vehicles has been especially strong, and in Q2, we reported our second consecutive quarter of year-over-year sales growth. We were the only foreign OEM to gain share, and we reported positive equity income. In the U.S., the industry saw a spike in demand during the quarter due to tariff-related sales pull ahead, especially in April and May. Then in June and July, demand returned to levels that are in line with our full-year outlook of 16 million units. Throughout the first and second quarters, GM outperformed the market in total, fleet, and retail market share year over year. We also gained total, fleet, and retail market share sequentially from Q1 to Q2 despite increased incentives from our competitors. We delivered all of this with inventories at the end of June that were down year over year by almost 10%. Our incentives remained well below industry average for both ICE and EVs, and our pricing has been relatively consistent. I'm particularly pleased that the crossover portfolio we highlighted at our last Investor Day has been delivering record results. These 10 all-new or redesigned crossovers took huge leaps forward in design and technology, resulting in strong demand and revenue growth while reducing complexity contributed to stronger profitability. The Chevrolet Equinox alone gained nearly six points of retail market share year over year in the industry's largest segment. thanks to the popularity of both the ICE and EV models. We are growing in EVs because we have a strategic portfolio of vehicles that people love for their design, performance, range, and value. Five years ago, the EV market essentially had one player. Today, there are 30, and Chevrolet is now the number two EV brand thanks to the success of the Blazer EV and the Equinox EV. And in Q2, Cadillac became the number five EV brand overall. Cadillac has also become the luxury EV leader, fueled by the launch of the Escalade IQ and conquest rates that are above 75% for the Lyric and approaching 80% for the Optic. At the same time, all-electric road trips are getting easier by the day thanks to our fast-charging collaborations, which have been focused on regional interstate corridors outside of the coast. For example, GM Energy 350 kilowatt chargers are now available at nearly 200 pilot travel centers along I-75 between Michigan and Florida, on the routes between Minneapolis and Milwaukee, Detroit and Cleveland, San Antonio and Houston, and Dallas and Nashville. Stations are typically no more than 150 miles apart, so it's easy to take long-distance trips knowing you'll have access to reliable fast chargers and convenient services when you need them. In addition, the first of Iona's charging stations, which can deliver up to 400 kilowatts, are now in service in North Carolina, Texas, Pennsylvania, Ohio, Kansas, Arizona, and Missouri. By the end of the year, our customers will have access to more than 65,000 public fast charging bays across the country. That will grow to more than 80,000 by the end of next year and 100,000 by the end of 2027, a more than 50% improvement in just three years. The growth of our ICE and EV business is also fueling the expansion of our highly acclaimed Super Cruise technology, which in turn is helping guide the development of our personal autonomous vehicles. We're making steady progress growing Super Cruise. The technology is now offered on 23 models, and we continue to add new capabilities. We're on track to have more than 600,000 customers by year-end, each of whom has paid up front for three years of service, with 70% of new Cadillacs delivered equipped with Super Cruise. Additionally, we have changed the way we approach the market for our OnStar products, and we now price our vehicles to include a period of basic OnStar services. As a result, our OnStar subscriber totals are increasing at record rates, and we now have even more ways to engage directly with our customers throughout the life of the vehicle to drive our industry-leading loyalty even higher. As of today, we have booked $4 billion of deferred revenue from Super Cruise, OnStar, and other software services that we will recognize over time. Our projected Super Cruise revenue will be more than $200 million in 2025 and is expected to more than double in 2026. As we continue to scale, we anticipate growing at a robust double-digit CAGR through the end of the decade. We have also introduced a new and improved My GM Rewards customer loyalty program and credit card portfolio that gives our members access to more savings opportunities on GM products and services and exclusive access to member-only experiences like trackside access at racing events and off-the-grid EV excursions. We invested in these programs because our loyalty program members are very valuable. They buy vehicles with higher MSRPs and visit dealers for service at nearly twice the rate of non-members. To build on our leadership positions in ICE and increasingly in EV and develop new sources of competitive advantage in AV software and services, we continue to strengthen our team with experienced executives and tech innovators like Sterling Anderson. Sterling, who was the co-founder and chief product officer for autonomous trucking company Aurora, is now GM's chief product officer. We are also embracing AI across the enterprise, which is why we recruited Google and Cisco veteran Barack Tarosky to lead our efforts under Apple veteran Dave Richardson, who leads software and services engineering. Barack is building a world-class team of applied AI experts and researchers as we redefine how intelligence powers vehicle performance, customer experience, and operational excellence at GM. I believe everything we're doing strategically and proactively, along with closer alignment of emissions rules with consumer demand, will further differentiate us from our competitors, increase our resiliency, and drive overall profitability. For example, The $4 billion of new investment in our U.S. assembly plants will add 300,000 units of U.S. capacity for high-margin, light-duty pickups, full-size SUVs, and crossovers to help us greatly reduce our tariff exposure, satisfy unmet customer demand, and capture upside opportunities as we launch new models. The capacity begins coming online in just 18 months, after which we project building more than 2 million vehicles in the U.S. each year as we scale. At Orion Assembly in Michigan, this includes production of the Cadillac Escalade, followed by the launch of our next-generation full-size light-duty pickups. Adding Chevrolet Equinox ice production at Fairfax Assembly in Kansas and moving Blazer ice production to Spring Hill in Tennessee will further reduce our tariff exposure and increase utilization of our existing U.S. capacity. In addition, we will have even more flexibility to adjust our mix of ICE and EV production than we do today, which will help us operate both Spring Hill and Fairfax more efficiently and a slower growth EV market. Despite slower EV industry growth, we believe the long-term future is profitable electric vehicle production, and this continues to be our North Star. As we adjust to changing demand, we will prioritize our customers, brands, and a flexible manufacturing footprint, as well as leveraging battery investments and other profit improvement plans. The battery strategy we are executing is central to our efforts to make EVs profitable and an even better choice for our customers. Domestically developed and produced cells are also necessary for a resilient and secure American-oriented supply chain. Our joint venture cell plant in Indiana, for example, will produce prismatic cells to help lower pack and total vehicle costs. Foundation work is almost done, and more than 50% of the steel structure has been erected. We have also confirmed that Altium Cells Spring Hill and Tennessee will begin producing LFP cells developed by our Korean partner LGES in addition to high nickel pouch cells starting in late 2027. The new lithium manganese rich or LMR chemistry that we are developing with LGES will be another game changer because of its unique balance of energy density, charging capability, and cost efficiency driven by its reduced nickel and cobalt contents. In large truck packs, we believe the potential savings from LMR may be even greater than using LFP at today's metal prices. Our expertise in leading cell chemistries and formats is also creating new business opportunities. Today, GM Second Life EV batteries are being repurposed by Redwood Materials. In addition, we're finalizing an agreement with Redwood to supply battery modules to Redwood Energy, their new energy storage business, which has been formed to meet surging power demand for AI data centers and other applications. Importantly, all of the cells our JVs build have and will continue to qualify for the Advanced Technology Manufacturing Tax Credits, and we're grateful for the continued support of the administration and Congress as we invest in American battery innovation and job creation. As you can see, we are well positioned to succeed in an ICE market that has now a longer runway. We will continue to drive improved profitability for ICE and focus on EV profitability improvement to generate ongoing strong free cash flow. In addition, we'll continue to drive American innovation in batteries, AV, and software to further differentiate GM. Thank you, and I'd now like to turn the call over to Paul, who will share more details about the quarter.