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DealBook Online Summit 2021
November 10, 2021, Online
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Recharging an Industry
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About the talk

The veteran auto executive and incoming head of the Business Roundtable Mary Barra discusses her company’s road map for taking on Tesla as the leading seller of electric vehicles — and the urgency behind the industry’s technological transformation.

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Mary Barra
Chairman and Chief Executive Officer at General Motors
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Welcome back the deal book on. My next guest is Mary Barra. General Motors chair and CEO. She's one of the most powerful, female CEOs in the country and leaves the automaker, and she has served there for whole entire adult life, quite something. And she's not moving it, towards an electric future, over the summer. She announced the GM would increase spending on electric and autonomous vehicles by 30% to 35 billion dollars through 2025 all in effort, towards a goal to overtake. Tesla as the market leader, in this increasingly competitive space. We want to welcome their Ivar, who we should

say, is also going to be the incoming, chair of the Business Roundtable and it's great to have you back. We have done this a bunch of times together and I always enjoy these conversations and in particular at this moment, given what's happening at GM, what's happening in the car business and Evie's, I want to talk about the strategy, but I was going to ask you about what's going on in terms of the valuations of all these companies, for just a moment. If you'd indulge me because today is worth 85 billion dollars Tesla is worth a trillion dollars forwarded worth about

$79 billion Lucid, which literally is just has cars going to have lots of first time is work 70 to do in dollars. Toyota 288 billion + rivian with just went public. Now. It's 66.5 billion dollars again with not a lot of vehicles on the road. What is going on? This is make any sense to you. We are now in because we invested in over 34 years ago, and electric vehicles with the LT and platform as the Hummer comes out, yet this year as the lyric comes out early next year as well. And it's just a steady run. We'll have our billing battery plant up and running next year. So, I'm just

excited to get all these vehicles out to leverage the men and women of General Motors in the manufacturing talent that we have. So I see it is. Opportunity for General Motors to capture significant more value. Would you look at these valuations? Say this makes sense to me. Do you say this makes no sense to me. I mean, I look at every competitor as somebody that I respect and then, you know, we have to be better. Be faster have vehicles that consumers want to have solved the ownership equation. And so that's the way I look at it and I would say if anything, it

motivates me to work even harder when you finish a look at this thing as a trillion dollars, that's the opportunity set. The question is, whether that's really the opportunities that or whether there is there, I say, and overvaluation. Even Elon Musk has said he believes the company's overvalued and so whether you're trying not going to come down, you're going to get to the middle. That's the goal. Or you think, actually that is the opportunity. That can happen cuz it's not just electric vehicles.

Frankly. It's, I think is even more of an opportunity is the fact that the vehicle is a software platform, and we started rolling out the electrical architecture to support that back in 2019. We just announced altify that allows us to quickly update and roll out things to customers. After they, get your vehicle can get better throughout the software platform. And then the other aspects are we have is a tie me whether it's super Cruise, alter Cruise or cruise. And so I look at those three areas and the Tams associated with those and I think we have a tremendous opportunity to

grow. So weather. Is it here in as a tear in here? Is it here? Is it here? It's way, way up there in my life right now. In terms of the electric vehicle Market, you have that 19% of the market Tesla has about 63% of the market, five years from now, if you succeed. What else has their own success in this space? What is that pie chart look like, do you know what the Distortion that's happening? With the semi shortage. We have been the leader in the United States with the number two, in China. For many years. I

think, when you get to you, no wanting to get an, excuse me to get a 50% all Eevee's. You have to win customers, that they only drive one vehicle. The only own one vehicle they depend on that vehicle everyday. General Motors has brands that they trust. We have the highest loyalty rating. We have manufacturing plants that are ready to go. And see when I look at our ability to scale to serve customers. I think we're incredibly well positioned and we're not going to feed our leadership position to anyone who is in the lead and where everybody is

in for a long time. People thought that maybe waymo Google was it at the top and cruise was coming up there. And a lot of people talked for a long time to be way behind because They weren't using wide are they were just using cameras feels like things have changed. How do you see it right now? Well, I think Chris is being incredibly well, positioned. I mean Cruise, literally in San Francisco is one permit away from being able to actually charge for rides in San Francisco. It will be the only eighty company working in a dense Urban environment. And we know that's a tougher AZ solution

to solve. So I couldn't be more proud of what the cruise team has accomplished. And I think one of the reasons there I think in the lead is because of the deep work that they're doing with General Motors in the Deep integration of the technology. The fact that we're leveraging all the automotive know how for the origin that comes out in here. So I'm super excited about it. But then we also have no super cruise and ultracruz which are a driver Assist Technology. But continuing to be more and more capable. Our technology is independent leagues in assets to be the best. And so I feel like we

have a very robust plan as it relates to autonomy in a coming at it with salt. Super hard problem then taking costs down, but also continuing to increase. So, I wouldn't trade our autonomy position with anyone if you like. I like order order and afterwards actually has vehicles on the road. I mean, if you saw the video Just A Week Ago, Kyle took the first ride. No one. I mean, the more seen, you know, how people on the street respond is pretty cool. So I

think it in a space where there's not a complete transparency of who's really how far I look at what we're doing. And I think that's what legitimately put this in the late. That there will be an accident. You've seen this, by the way, I mean, there's an accident with Tesla. If there is so much attention on the autopilot feature, and whether it's being in this market, I know, you're, you're not doing that. But how concerned are you about that? We've talked. And I think I probably asked you this question before over the years. Politically. When do you think I'll be palatable to

the country about 30,000 35,000 deaths on the road every year. But if I told you that number came down to even 1,000, but it's the robot. It's the computer. Pet crates that accident that creates that death will the public accept that when you look at how you can impact safety meeting right now we know is that you talked about just the us alone over 90% of them are caused by human error and autonomous vehicles. Don't drive a, they follow all of the traffic lines Bay, Innovation process information,

with all the cameras and and the compute power, they can process information faster. And so I think it's ultimately safer and then when you take your General Motors knowledge is Stacy and how to put vehicles on the road. I had to demonstrate that. I think that's going to be a compelling case for Eevee's. As you know, you have become now the beneficiary to some degree of this latest bill. In that there will be a bigger tax incentive for your vehicles because you have your new Labour, then

there will be four other vehicle makers including the likes of 2. And Toyota, what's really important to do is to level the playing field from the fact that the early movers were penalizing and use her two hundred thousand credits. So people are just now rolling out an Eevee. They have a $7,500 Advantage. I mean, I think when I look at the trained Workforce in the morning, to have jobs in this country, good paying jobs, I think negative. The bill is set up to instead of eyes what you know, what the country is looking to build is a strong middle class

by my math that on average Tesla employees, who are not unionized. Here's an hourly basis. May be making more money than unionized workers. For example at GM pretty robots. My last look at that at that was not the case again. There's no perfect transparent information. But what I would say is I'm incredibly proud of our Workforce are represented one, of course, work hand-in-hand with you. I appreciate that occurs to do that. I'm still working with the UAW together when we made great strides and safety and quality and training, maybe think about one of

the other things that has to happen is a robust Workforce. That knows how to build electric vehicles. We work in partnership with training with our Union. As they make their electric car in Mexico, not obvious how this serves American taxpayers. Again, I think that it clearly incentivizes to be in this country cuz where there's a component of built in the United States and then by jobs that are good paying job. So I think that is how the legislation turns out. I mean, that's not a done deal that build back better plan is not completely approved. What were very

supportive of is making sure that there's not a first-mover disadvantage, but then, I look at the other aspects of and I think it lines up with the administration's agenda, talk about GM and a number of meetings around Eevee's and somewhat surprisingly. It leads to some Tesla has not been invited to those meetings. You know why? That is. I'm not in charge of the guest list, but you sit there and say, this is a little strange get given the role that they played. I don't, I don't

give that a lot of thought, there's a lot of things I think about, as a relates to competitors. But as I look at, who's building the middle class, who has, who has great opportunities in a very talented Workforce. That's not something. I give a lot of thought to and the infrastructure around the vehicle. Again, I'm going to mention Tesla, but you'll see where this is going to make this deal with hearts recently, or at least. We think there's a deal in place with her. But part of the reason that

we stock market seem to give them some more value was cuz they said that there's a lock in effect that if Hertz buys a hundred thousand of these vehicles. It's not just the vehicles but it's the infrastructure and the supercharging stations. Are there ultimately going to be buying as well? And that that creates a long-term lock in effect, and I'm curious how you think about that lock. Think that's real. Weather. And whether you need to be doing the same thing as effectively as did our investor day that we're investing over 75 or 750 million dollars

because we know that customers they tell us cuz we talk to customers all the time and it's got to be a beautifully-designed vehicle in the segment. They want. It's got to have about 300 miles of rain, but then they want to know that there's a trusted infrastructure. And so we're working with a number of startups. We're doing our own investment because we think people need to be able to charge it home at work and then on the road. And so we're looking to solve Absolution for everyone, but I think ultimately having a charging infrastructure that's open to everyone is the way that we're

going to accelerate Eevee's faster. Seamless when it comes to these different stations that are going to run by different companies across the country in the same way. Again, I go back to Tesla the way that set up with what we're doing is in a weird kind of almost see if you can figure out at the aggregator. It's go to my Chevy app and you select and, you know, we're working with all of these Partners to make sure it's easy. Is he a one-click payment reservation know? It works. All of those things are going to be very important. So we're working to do that. Broadly. We

were talking to earlier and we were talking in particular about what happened to Taiwan and semiconductors. This is having a huge impact of your business. Where are we right now? Disproportionately head because of covid in Malaysia, but as we move forward, we're seeing fourth-quarter better. We have line of sight on 1:40 second. Half of 22. I think it's going to be even better and we A very robust road map, with all of our products coming out will have a new truck capacity with new

enhanced vehicles that trucks that are you have more featured, more models supercruise, and they're more and more greenhouse gas efficient. So it'll we're working on that journey. And so I see 22 being a very a very strong year for us at a strong North America year at what everybody focus is on at around 10% margins. Separately, I want to talk to you little bit about back to work. You has never stopped working right now, but in terms of vaccinations, you have not require employees to be vaccinated. From what I understand. We strongly encourage,

and we've shared a lot of information. But right now we're trying to encourage. Obviously we're looking at the implementation related to the presidential order and so we're going to continue on that journey, and we're going to work with our partners. And what's that thing? Like? What are they telling you? What do you think of percentages right now? Do you know how high it is? We have not done that same request for a represented folks in it again, for looking across the globe. We operate everywhere. And so everywhere were encouraging people to get the

vaccination. We're encouraging them to let us know. So we can make good safety decisions of how we run the operations. But again, we're working with our partners in educating and we're finding that every week. More and more people are getting back to me. If there is a mandate, do you imagine? And have you start to try to sketch out and do the math of how many people might walk off the job? And what kind of impact that can happen? The company, I work for the job situation at all. I mean, look at, they came to work and have been working for well over a year, following safety, protocols, and

we were very proud of our record where we have not had facility spread. The virus and so I look at how dedicated at War forces will work through it or you will be taking this new role at the Business Roundtable and I just wanted to ask you, how you think about that role and how you think it dovetails or doesn't in certain cases with GM itself. I think there's going to be times where were very line, but, you know, I have a job as the chair and CEO of General Motors to represent. What's in a

General Motors. Best interest and how we move forward. Brt. It's a slightly different role. There were representing, you know, over 200 companies making sure that we have a voice and we're working together with with the administration with you, across the country. So they'll be times where they dumped, him will be times where you're going to have to put my GM had on, or maybe Artie had on and I'm prepared to do so. Doug mcmillon and Jamie dimon before have done an excellent job of balancing. That and young. I follow that same path

because it's an issue that a lot of people are focused on as following the January 6th riots in Capitol Hill. You, you know, this GM was one of the many corporations that put a pause on political funding, but you started that funding and in some cases have made donations to, some of the Republican members of Congress who voted against certifying of the Biden election. Can you explain that decision? We look at, we don't agree with everyone here. We eat, we give it to those parties and we don't necessarily a pack donation, is not necessarily an endorsement of

every single thing that person has done. And so, but we do look on balance weed added additional requirements of what we're looking for. Since that time and I will stand behind the decisions. We have a committee that looks like that's what the cross. It's debated. And we think it's also important though at times to, to have to have that influence. And so will continue to be very measured and make sure we're all so long as we go forward consistent with our values. We ever said yourself. You know what? I mean? You're here, you are at your interview.

Let's get money out of this. We're not going to do it, an intended consequences and how it really turns out. I think are what most people don't understand, believe me. We've had those discussions at General Motors. Looking at what we do consistent with their values. We thought it was in the best interest to for that for the company. And for our, you know, where all of our stakeholders that we have a voice, to the issue of energy. We were having a conversation with Ken Griffin just before and we have the CEO of Exxon coming in just a moment and There is a big debate about why

Energy prices, and oil prices have moved as high as they have. There are some people now saying that this is actually a function of e, s g of companies. Moving toward some of these goals that is actually removing or reducing the investment in drilling in the like and that's going to if it's not a problem today. It's going to be a problem in the future. I think we have to look at. How do we make this transition in a way that we don't leave anyone behind? I mean, is I look at transitioning to Evie's we're going as fast as we can. But again, if we don't make sure that that customer

who only buys new new vehicles, but all they can afford is $30,000 and that's why we are targeting, you'll hear more about it at CES, the 70 that will have in that rain. We have to make sure we bring everyone along and so I think we have to have an aggressive plan. But we also have to make sure that we don't have unintended consequences in and cause shortages, and I think that's what Corporate America needs to look at him in French. To make sure we do this as fast as we can, but not in a way that is, if it causes more harm than good

new car missions. This is by 2040, but that's was $40 and Volvo. Take a look. When we said earlier this year, that we Aspire, and I'd say it's that, it's more than an aspiration. It's a plan that by 2030. All of our light duty Vehicles, sold in the US will be electric and we're working to accelerate that plan. I can't speak for other automakers. I think in a lot of cases from a, from a major automaker. We've set that path that others are now following. But

we're full steam ahead for full of your head. You have predictions about what can happen to price of oil over the next 12 months. It will continue to be moderate. Now, the events that the person who's studying it day in and day out of the aisle, so I'll share her views. Finally, I always like to ask you this question, before we end what car are you driving right now? Right. Now? I'm driving to go, get to drive an electric vehicle. I think they're going to find that they're not giving anything up in sector, getting to the customer. Experience is

great. I have to admit though. I'm, I'm waiting for my Hummer. Need a vehicle as you have you own them yourself, or you just, you said I own a handful of cards as well. My husband and his son, or our Camaro Firebird enthusiastically. We do own a Corvette as well will soon on a Hummer. And I've got my name on the list with 200,000 other hand razors for the lyrics. What number you on the list fair, so he'll probably I think it's important for me to demonstrate our products, but I signed up like everyone else

for the Hummer. The head of GMC. Buick of when we started the Hummer though. We actually overloaded the internet and so I was texting him saying, but I was a menace to get on the list for we look forward to seeing you with that. Mary bar. Thank you for being here. Thanks for the talk to you back in just a moment.

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