General Motors Company (NYSE:GM) Q4 2022 Earnings Call Transcript

I Michaeli: Perfect. That’s very helpful. Thank you.

Paul Jacobson: Yes.

Mary Barra: Thank you.

Operator: And our next caller is John Murphy with Bank of America.

John Murphy: Good morning everybody. Just a first question, Mary on the IRA, I mean, there’s a lot going on with the interpretation and the final rules being set here. Originally it looked like GM was going to be relatively advantaged just the way that you were set up on production in your supply chain, but some of the interpretations on the commercial vehicle side and the fact that leased vehicles may fit the bill of being commercial vehicles that may open the door to Europeans, Chinese, Japanese, South Koreans, anybody be shipping EVs into the U.S. and still getting a $7,500 credit. So just curious, what your thoughts are on that? How do you think the rules should be interpreted, and could there be the chance if this, loophole or change stays enforced that you might ship EVs in from China?

Mary Barra: So our strategy all along for a very long time has been to build where we sell. And I think when you look at the work that we’ve done with the battery plants in this country and all of the supply investments that we’ve made, that helps us have I’ll say supply chain resiliency more certain, it gives us the opportunity with some of the deals we’ve made to, I think, have a better cost advantage. And also it’s good for the country and creates jobs, and that’s what IRA was meant to do. And so we’re waiting to see what the final rules and are going to be from treasury. I think regardless of some of the issues still to be clarified from a lease perspective, General Motors is still going to benefit greatly because if you look at the production tax credits from sales and module perspective, and then where we’ll be from a battery component in critical minerals, we think we’re well positioned again.

The deal that we announced today, or the partnership, the equity investment, I think continues to reinforce it. So yes, we’re waiting to see what it is going to be, but our focus is on having a strong supply chain here. Obviously, when we get the final rules, we’ll look because, we do have a global footprint, but I think we’re focused on supporting North America production primarily from North America and to a certain extent from Korea. So again, we’re waiting to see, but I think you have to go back to what the intent of IRA was.

John Murphy: Yes, I agree with you. Just one followup, you mentioned fleet sales as an opportunity, fleet sales have been very low for the past couple years. I mean, fleets have been very under satiated or not satiated at all on their demand function. And now that supply is becoming more normal, how big a part of a recovery do you think they could have in the market just maybe in general where have they been for GM in 2021, 2022, and where do you think they might be in 2023? And how big a part did that play in sort of the development of EVs profitably into fleets in the early stages of the EV ramp