General Motors outperformed all expectations in the first quarter of 2020, posting $300 million in income on $32.7 billion in revenue. The results were discussed during the recent GM Q1 2020 earnings call, during which GM CEO Mary Barra discussed a number of things – including the company’s commitment to future GM EVs.
During the call, Credit Suisse analyst Dan Levy asked Barra about upcoming GM EVs, noting that the current environment of low gas prices and relaxed emissions regulations could make the case for pulling back on electric vehicle investment. However, Barra’s response indicated that it’s full speed ahead when it comes to electric vehicles.
“Our commitment is unwavering,” Barra responded. “We think it’s the right path forward and we think with the Ultium battery platform that we have, the partnership we have with Honda, the strength we have from China where EVs and new energy vehicles are a key part of being successful in that market, positions us extremely well to have a leadership position in EVs with a full range of EV vehicles.”
Levy pressed the issue, asking Barra to reiterate that cheap gas and relaxed emissions standards wouldn’t change the investment strategy with regard to GM EVs. Barra responded by saying that the transition to an all-electric future would happen gradually, and that in the more immediate future, GM would “continue to focus on full-size SUVs and full-size pickup franchises,” while also making those products “more fuel efficient and emissions efficient as well.”
Check out a complete transcript of the exchange below.
During the call, Barra also indicated that GM EVs like the Cadillac Lyriq crossover and GMC Hummer pickup were still on track, despite disruptions caused by the COVID-19 pandemic. The Cadillac Lyriq and Hummer EV will be the first two models in an onslaught of GM EVs tipped to include “at least” 20 all-new battery-electric models by the 2023 calendar year.
As covered earlier this year, executives expect the new GM EVs to be profitable right out of the gate, just as a standard gas-powered vehicle would be.
Dan Levy (Credit Suisse): “We’re obviously in an environment of really cheap gas, and regulations in U.S. have just been eased – and you are for the most part primarily exposed to the U.S. You could make the case that this would prolong the EV uptake and that you could actually put the brakes on EV investment temporarily. Is the rationale for maintaining EV investment right now that this is your future and there’s just no compromise on that vision, even with these unprecedented circumstances?
Barra: Dan, I think you said it well. Our commitment is unwavering. We think it’s the right path forward and we think with the Ultium battery platform that we have, the partnership we have with Honda, the strength we have from China where EVs and new energy vehicles are a key part are a key part of being successful in that market, positions us extremely well to have a leadership position in EVs with a full range of EV vehicles. So we are looking at every possible angle to continue to accelerate our EV and our all-EV future.
Levy: And cheap gas and relaxed emissions isn’t going to change that, correct?
Barra: Well, again we believe this transformation will happen over a period of time, and while we focus on EVs, we will also continue to focus on full-size SUVs and full-size pickup franchises that we have, and we continue to make all of those products more fuel efficient and emissions efficient as well, so I think it helps in supporting our franchises even when you have a low gas price. From a regulatory perspective, we’re being driven by what we think is the right thing for the future and where the opportunity will be to get there and be among the leaders.