Mary Barra: So great question. And from a China perspective, I think COVID definitely had an impact, and COVID across the country very impacted from a Shanghai-specific perspective, that impacted our business. But I think what is really important for us right now on the low end, we need to build on the strength we’ve had with the Hongguang Mini EV. And we’re repositioning with SGMW, the Baojun brand to be the right — have the right brand characteristics from an EV perspective. And so that’s very important that we execute that in the Wuling — S-GM Wuling joint venture. In the S-GM venture, it’s getting the vehicles off of Ultium launched and in in-country because we’ve seen good reception to them. We just did some launch in the last couple of weeks, and the market reaction was very good.
So it’s getting those vehicles scaled and getting them into the market. We think because they’re new, we’re going to — brand new and well received, we’re going to be able to achieve the pricing that we intended for those. And we’re just cap-remain dynamic. And that’s why in addition to getting the Ultium EVs launched in China, we’ve also got to really continue aggressive measures on taking out structural costs, which we already will do have plans in place to execute on, and we’ll report on those as we go forward.
Ryan Brinkman: Okay. Great. And then just lastly, with regard to the reiterated low to mid-single-digit EV margin target in 2025, which I think is encouraging in light of the recent pricing action, this target continues to exclude any benefit from the energy tax credit portion of the Inflation Reduction Act. When you introduce that target — ’25 target at the EV Investor Day last November, it excluded the benefits in part. Because I thought that the act wasn’t yet law and there were uncertainties about whether the credit would be refundable against the — applicable against the manufacturing cost or if it was only against the taxable income, and then possibly maybe you had yet to finalize negotiations with your JV battery partner, then just LG Energy Solutions, how those credits would be shared.
Now that we do have the details around the Act, and it’s passed into law, do you have any updated thoughts on how much the low to mid-single digits margin could benefit from those credits? And then with regard to the new JV from Samsung, I mean, you entered into that JV knowing about the IRA. So did you already finalize how that would be shared relative to the credits going into the JV? And did that maybe enter into your thinking to start a JV with an additional partner?
Paul Jacobson: So Ryan, I’ll take a shot at that. I think when you look at the guidance that we gave around EVs back in November, yes, we drew sort of two lines around it, just to help show you where we’re going. So the first was the low to mid-single digits without any tax credits. That’s to make sure that you know that we’re focused on the vehicle profitability. We’ve obviously are in this for the long term, and we’ve got to make sure that we’re hitting goals for the long term, assuming that we get a normal world where maybe there aren’t EV tax credits. So the vehicle program is one thing. The second piece of it, on the tax credits themselves. We did say that about $3,500 to $5,500 per vehicle is what our estimate is. We said about $300 million this year that we would expect to get out of that.
We’re not going to comment specifically on any deals, how that might be shared, et cetera, across the board. But again, we feel confident about the tax credits in the short term, helping us to narrow that gap between that low to mid-single-digit vehicle profitability on the vehicle and getting it to ICE parity faster than we originally thought. So those are the ways that we’re thinking about how we go to it. But longer term, the vehicles have got to stand by themselves.
Operator: Thank you. Our last question comes from Colin Langan with Wells Fargo. Your line is open.
Colin Langan: GM seems to be leading in sort of securing the raw material supply. Curious what your thoughts are on the 2032 EPA targets that will require about 67% of vehicles to be EV by 2032. Do you think there’s enough lithium to hit the targets? Do you think you could get enough lithium by then in the industry? And do you think we have enough capacity in place to get there, I guess, considering you’ve been pretty good about getting capacity so far.
Mary Barra: I’ll let Paul talk about — specifically about lithium. But when we look at the ’27 through ’32 targets that what EPA has put out, we’re still digesting them, understanding what it means, and we’ll provide comment as appropriate. We do support continuing to increase to combat climate change. But we’ve got to dig into the details a little bit more on what’s being put out there to make sure that we’re — this is being driven — able to be driven by customer demand, because anything else is not going to be productive. And then Paul, you can talk about the lithium specifically.
Paul Jacobson: Yes. So Colin, obviously, we’ve been doing a lot of work with multiple partners across the entire battery raw material spectrum. We think that’s the prudent thing to do, both for not only from a scarcity perspective, but also making sure we get to a security of supply for our longer-term ambitions. So we’re not just looking at, do we do a procurement contract for this year or for that year? We’re looking at forming big long-term partnerships. So whether it’s the work we did with Lithium Americas, the joint venture that we’ve done with POSCO, you see these relationships getting set up as structural. And that’s where we’re really focused to do because we’ve got the 1 million vehicle target in 2025. We said we’re targeting 50% by 2030 and then ultimately, all electric vehicle production in 2035. So building that infrastructure now is where I think we’re securing an advantage.
Colin Langan: Got it. And you’re ahead of your $2 billion annual target for the next two years. I just wanted to check, does that incorporate the potential changes in the UAW contract, because that could sort of add some costs? And is also the guidance contemplates things like the signing bonus and stuff like that in terms of cash flow that might occur this year from the UAW contract?
Mary Barra: We are — I mean, we aren’t even at the negotiations, and we’re not going to negotiate in the media here. We’re working to make sure we’re building a strong relationship with the new leadership, getting to know them and making sure we identify what are the challenges of the business and then it becomes working together to solve the issues to get to a good place. And so beyond that, we’re not going to really comment. But I would say with what we’ve done in the past, we’ve always demonstrated that we can continue to drive efficiencies, and that’s what we’ll do.
Mary Barra: All right. Well, thanks, everybody. I really appreciate all your questions today. And I want to close by reiterating what I said as we opened the call. I really believe we have the right products and strategies in place to continue to deliver strong results. And although we have a lot of work to do, there’s a lot of execution as we ramp up EVs, I believe that’s where GM shines. We have the capability to execute, and that’s exactly what we’re going to do. And I believe that we’re going to do it faster than most people think. In addition, this is a milestone year for Cruise as they continue to expand their commercial operations. And with the EVs that we have coming, I really think it’s a breakout year for Ultium. So I look forward to sharing updates along the way, and I really appreciate your time today. So I hope everyone has a great day.
Operator: Thank you for your participation. Participants, you may disconnect at this time.
