Mary Barra General Motors Chair & CEO speaks with Yahoo Finance Editor-In-Chief Andy Serwer at the 2022 Yahoo Finance All Markets Summit: New Challenges, New Opportunities.
ANDY SERWER: There's no better place to start than with GM CEO Mary Barra, a business leader who arguably more than any other is at the center of the many new challenges and opportunities in our world today. I met her a few days ago in Detroit at GM's famed Design Center and started by asking her about a brand new business, GM Energy.
MARY BARRA: One of the things we want people to understand is not only is an electric vehicle your mode of transportation, how you get from point A to point B, but it can also be a power source. And I think that's going to be very important as we look and really strengthen the grid in whatever country we're doing work. And in addition, we can leverage the technology we have, the battery technology, to provide clean energy, energy storage, and also supplement the grid. So we're really excited about the business opportunity based on the LTM technology that we have.
ANDY SERWER: How big a business can this be for your company, and where do you see it in five years, for instance?
MARY BARRA: We haven't put those numbers out yet, but we see it being a significant growth opportunity for the company. So when you look at not only are we moving into electric vehicles that we think in the near to medium term will be growth because where we have opportunity to perform better is on the coast, that's where EV adoption is happening more quickly. Then you look at BrightDrop and we don't really have a light commercial vehicle business, so getting into the electric light commercial vehicle business is growth for us as is GM energy. when you look at it being another reason people buy an electric vehicle but also what we can do beyond the vehicle from an energy perspective.
ANDY SERWER: And you have all manner of electric vehicles out there coming. What GM vehicles are on the road right now that are EVs, and which ones are coming, say, in Q1 of next year?
MARY BARRA: Sure, well, right now we have the Bolt EV, the Bolt EUV, which I'm driving. We also have the GMC Hummer EV, and we have the Cadillac LYRIQ that is just starting production. So that's all out right now. I do have to say we've had such strong demand for the Hummer and the LYRIQ that we're into next year from an order perspective, in some cases beyond. But then in first quarter, we'll launch the Silverado EV, and then if you go a little bit longer into second and third quarter, we'll have both the Chevrolet Blazer EV as well as the Chevrolet Equinox EV. So when we get to this point next year, we have a lot of models in the heart of the market, the largest segments in the market.
ANDY SERWER: We're here in GM's Design Center. Talk to us about what this means to GM history and also what it means for the future of the company.
MARY BARRA: Well, this is literally the building and the room where we review new vehicles and look at them from a design perspective, clay models or we have a lot of technology in this room from a virtual perspective as well. So this is where it happens. This is where decisions are made, and it's a vital part of the design process because no matter how much technology you have on a vehicle, it has to start with being beautiful. And I'm so excited about the new designs we have coming out.
ANDY SERWER: I want to ask you about the economy, and you have, obviously, a unique perspective because you can talk to your dealers, and they can talk to you about consumer demand. Where is the economy right now based on where you sit, and what do you see going forward?
MARY BARRA: Well, we are starting to see some changes from a used car pricing perspective. and we're watching and we're seeing, right now, it's very hard to know exactly what's happening in the market because we have been supply constrained for so long. So we know there's pent up demand, but also there's challenges in the logistics and moving vehicles once they're built. Even we still are dealing with semiconductor shortages, but then when we get to that point, getting vehicles moved to get to the dealers has been challenging as well.
So it's really an interesting time. We're watching almost on a daily basis to see what's happening. We still see strong demand for many of our products, especially our full-sized sized trucks and our mid-sized crossovers, but again, we're watching all the signs. I mean, I think we're listening to what everyone else is saying around the globe, and so we're preparing next year for a year that will look more like we have a little-- it will actually be more demand but a little less demand than what we would think because we're going to be conservative, make sure we set our cost structure up that way.
So then if things turn out better, we're well positioned. But most importantly, because we have so many important EV launches next year as well as cruise growth, we want to make sure that we can fund our future regardless of where the economy is-- downturn, recession all those words that are being used. We want to be prepared regardless of the environment.
ANDY SERWER: And you're not seeing higher rates impacting consumer demand.
MARY BARRA: We haven't so far, but again, it's a very unique situation because we've been supply constrained for so long. And so that's what we're watching because we know a vehicle is a very important purchase that people make, and that they may make different decisions depending on how they feel about their own personal economic situation.
ANDY SERWER: And you mentioned the chip shortage and supply chains a couple of times now, and how is that being mitigated? Is it improving, and then what about some other supply issues you might have with batteries and the inputs that go in there?
MARY BARRA: Sure. Well, from an overall supply chain, we do see the semiconductor supply improving quarter by quarter, but we still see more volatility than we're used to. I think one of the reasons for that is the supply chain has been stretched so thin. So we're looking for improvement as we go forward. But it's still there, and it's still an issue.
As I said, logistics is-- getting the vehicles moved is another challenge, but then when you look at other like supplying for EVs, one of the things that's going to be key to unlocking more Hummers, more LYRIQs and all of our vehicles is the battery plants. And we're actually running the battery plant in Ohio now, and as that is able to ramp up, more cells will provide our ability to provide more electric vehicles.
I would also say GM, we actually have signed agreements for the production that we need between now and 2025 to get to our million units in 2025 in the United States and more than that in China. So we're on track to do that, and we have that supply chain secured.
ANDY SERWER: You just mentioned China. I want to follow up there. You've had such success in that country with Buick. There are a lot of new EVs there. What does the future of that marketplace look for you?
MARY BARRA: Well, we're still-- we still think there's tremendous opportunity there. As you mentioned, the Buick brand is very strong as is Cadillac, and we also have Chevrolet there. But we also have a joint ventureship with Wuling that allows us to sell not only the Baojun brand but some other vehicles. Like the Hongguang mini EV has been one of the highest selling vehicles this year from a Chinese perspective, from-- for EVs. So we think there's opportunity. We're definitely seeing the landscape change. We're seeing more competition from domestic suppliers, but we think especially in luxury and with Buick, the strength of those brands we think is going to remain strong.
ANDY SERWER: I want to drill down on a couple of domestic brands, Equinox, for instance, which sounds like a car for everybody, right, with a price point. It's an EV coming out in a year or so. Talk to us about that one.
MARY BARRA: That comes out in the second part of next year, and what's so important about the Chevrolet Equinox EV is that it's in the biggest segment globally, the biggest segment from a North America perspective as well, and it's about affordability. So if you're around $30,000, you really get into the sweet spot of the market. And we've been really excited because we revealed the vehicle, and people-- there's been such a strong positive response to the vehicle.
And when people get in and actually get to drive it and see how great driving an EV is and then they see the technology on that vehicle-- it's got a 17.7 inch screen. It has safety features and safety technology. People are going to realize they're getting a great vehicle and able to move into EVs with confidence.
ANDY SERWER: On the high end, the CELESTIQ, am I saying that right?
MARY BARRA: Yes.
ANDY SERWER: It's sort of a customized Cadillac, right? Talk to us about that one.
MARY BARRA: Well, so it's a bespoke Cadillac. It really, if you look at what Cadillac means for so many people, people still use the term Cadillac for standard of the world . And we really believe with all the work we've done not only in our internal combustion with the Escalade V and the Blackwing series and the attention to design, as we move to our all-electric future with Cadillac CELESTIQ is really-- is going to be the pinnacle from that perspective.
It will be hand-built on this site, and the customers that will be able to customize the vehicle from interior exterior, so we're really excited. The response for people that we've really revealed the vehicle to has been very, very positive. And so this really is one of the final steps in regaining that standard of the world for Cadillac, and the response has been tremendous across all of our Cadillac products.
ANDY SERWER: Mary, GM's stock has lagged a bit over the past year or so, and I'm wondering what you would say to shareholders. Why should they buy the stock, hold the stock, own the stock going forward?
MARY BARRA: Well, you know, I think there's been so much attention earlier this year was how many EVs are you selling today? And we were in a difficult situation because we did the right thing for the consumer and for safety. And when we found there was a manufacturing defect in the Bolt cell, we stopped producing so we could do the replacement cells for our customers. As we've moved through the year, we were able to start building the Bolt again, and we've actually had two record months in a row of sales of the Bolt EV and EUV.
So I think that impacted the early view, but what I would say to shareholders is take a little bit longer view because this isn't a one-year race. We are at the very early stages of driving EV adoption. And when you look at the vehicles that we have coming out next year with the Silverado EV, the Equinox, and the Blazer, again, those are big segments of the US industry. And to have really credible products in that I think is going to allow us to grow, and that's why we're confident that we're going to hit our ability to produce a million units and see strong demand for our vehicles by the time we're at 2025.
ANDY SERWER: Let me ask you about the workforce here at GM. Everyone's back at work. How's that going? Are you retraining people to work in facilities that manufacture EVs? Talk to us just generally about that.
MARY BARRA: Sure. Well, one of the things I want to give a big shout out to is our manufacturing, our warehouse, our design, our R&D. They have been working all through. I mean, they were off for a very short period of time at the early days of the pandemic, but they have been at work all along. And so without them, we don't produce vehicles. We don't design vehicles. So first of all, very happy and proud of that team.
We are in the process of having people come back to work now. We're going to be communicating more because we've recognized to maintain our culture and to get the interaction, we've hired probably about 10,000 people into the company during the pandemic. And so having those people actually come to work, and I call it it's that five minutes before the meeting starts and the five minutes after it ends that if you're on Zoom or Teams you just hit leave, but the work that you get done, the integration, the mentoring, the learning I think is invaluable.
So we're going to be having people that have been working remotely start to come back to work. We're working with each of them. It's almost a plan for every person to understand how we do that in each area, but I'm confident that we'll move through that. And early next year, we're going to share more with employees in the next couple of weeks and we'll have people come back.
And then the final question you asked was training, and we actually on this site also have technical training. So for our-- especially our manufacturing team, when they need to learn how to build an EV and to do it safely because if you think about very different from an internal combustion engine to safely designing, testing, validating, and building and servicing electric vehicles, and there's training that happens right here. But we actually have a senior leader dedicated to make sure we do all that safely and our people are trained.
ANDY SERWER: And charging stations, a big issue across the country. You just signed an agreement with Pilot. How are you thinking about that and how it connects to the vehicles that you make?
MARY BARRA: Well, charging is the next hurdle. Once people get past range anxiety, and all of the EVs we have coming will be 30-- over 300 miles on a charge or more, if a person chooses on select models. So the next issue becomes but where can I charge it? And so we've learned for most people if they own a garage, they'd like to charge at home. And that's why for instance, on the volt EV and EUV, we provide-- we are providing assistance or providing the charger for them.
But as we look and look across the country, we know there needs to be more done for the charging infrastructure. And so our arrangement with the Pilot company is to put charging at the location so as people are on a road trip, because Pilot covers most of the country, they're going to have the opportunity to charge. If they're a GM vehicle owner, they'll have the ability to have special discounts and know that they have availability.
We're also doing work with our dealers because if you think about our dealers, they know the communities and-- very well and not just to charge at the dealership but for where do we install chargers in the local community? And so we have a partnership with our dealers that we're investing. Overall GM is investing 3/4 of $1,000,000,000 to support a robust charging infrastructure. We're also working with a number of other startup EV charging companies to make sure that charge anxiety is something that people don't have to worry about.
ANDY SERWER: Final question, Mary. Governor Newsom in California has mandated that all new vehicle sales in the state of California after 2035 need to be EVs. Is that reasonable, possible, and what do you anticipate in terms of other states or countries mandating rules like that?
MARY BARRA: Well, first of all, we're very aligned with what Governor Newsom mandated because at the beginning of last year, we said our plan is to have all of our light duty vehicles be electric by 2035. So that's the plan that we're working, so we'll be ready. So your question is it feasible? Absolutely. I do believe there will be other states. I know there's other states looking or have already made similar decisions, and we know that's happening in countries in Europe, as well. So we're well positioned to meet that challenge, and we think it's the right thing to do.
ANDY SERWER: Mary Barra, thank you so much for your time.
MARY BARRA: Thank you.