Mary Barra: So on the further funding at Cruise, I’ll take that, and I’ll have Paul answer — excuse me, the other question. As we get the detailed plan of how we’re going to relaunch Cruise in the road map, then we’ll evaluate the overall funding needs. And we’ll determine is it internal or externally sourced.
Paul Jacobson: And Dan, on your question on cash, I think the simple math is correct. We would obviously see a sizable increase in our cash balance. Our capital allocation stance remains the same, which is to invest in the business. And we’ve talked about $10.5 billion to $11.5 billion of CapEx this year. We have been streamlining that and making that efficient and a priority to drive free cash flow. And as we look at the balance sheet, I think the balance sheet is in really good shape. And there’s no change to our stance of, call it, $18 billion or about $20 billion of cash on hand. So clearly, we’ve demonstrated a renewed commitment and prioritization of returning cash to shareholders. And we’ll maintain that flexibility going forward.
Dan Levy: Just to clarify, the $18 billion, $20 billion, is that a target or is that a floor?
Paul Jacobson: That’s kind of been our floor/targeted range. Obviously, we’ve carried quite a bit more than that over the last few years as we dealt with some of the uncertainty. But as we imagine — or as we said in November when we announced the share repurchase with a lot of that uncertainty behind us, lower CapEx spending, we felt comfortable operating at that lower balance. So $18 billion to $20 billion feels very comfortable as the targeted range.
Dan Levy: Great. Thank you.
Operator: Thank you. Our next question comes from Emmanuel Rosner with Deutsche Bank. Your line is open.
Emmanuel Rosner: Thank you very much. First of all, I was hoping to ask you about the scale required to achieve the profitability goals. So I think when you shared those goals back in November, in particular, the 60-point EBIT margin improvement this year, I think 60% of that came from scale. I’m curious if the 200,000 to 300,000 units you’re planning for this year, is that enough to get you that scale? So are you counting more on like lower battery costs and maybe a bit of a shift in terms of some of the savings? And then similar question on the mid-single-digit EBIT margin target for next year. I think some of it was going to come from scale. What kind of unit volume you need to get the scale piece of — to get to these targets?
Paul Jacobson: Good morning Emmanuel. Thanks for the questions. On the 2024 numbers, I think they’re wholly consistent with the 200,000 to 300,000 range that we’ve articulated here. And as I mentioned earlier in response to a question around EVs, the low 200,000 is kind of what gets us to the point where we feel comfortable about getting the variable profit positive from there. Obviously, growth is a component, but it’s a much smaller component of the walk from 2024 to 2025 than it is from 2023 to 2024. But it will require some growth. We’re not going to commit to that other than just to say kind of that’s where we stand, and we’ll see where customer demand is going forward. And the other point, if I didn’t make it earlier on the lower battery raw material costs, keep in mind that we don’t start to see meaningful benefit from that until we get to the middle part of the year, because a lot of the cells that we have in inventory were built with higher raw materials costs.
So while we’re producing cells today, we’re going first in, first out on the cells. So we have a little bit of a lag before we realize that. That lower battery raw material cost of about $4,000 a vehicle that we articulated, we’ll also have some annualization benefits in 2025 since we’re not getting the full benefit here in 2024. I hope that’s helpful.
Emmanuel Rosner: Yes, very helpful. Thank you. One very quick follow-up on Cruise. The spending, $1 billion lower for this year. Is that — could that be considered sort of like a new run rate for spending? Or is it sort of like a temporary situation as a result of some of the parts currently in the testing and rollout?
Mary Barra: Emmanuel, I would consider it right now it’s our best estimate for this year. Obviously, as we develop a much more detailed plan that will inform over the next couple of years what the spending needs to be, so more to come.
Emmanuel Rosner: Thank you.
Operator: Thank you. Our next question comes from Chris McNally with Evercore. Your line is open.
Chris McNally: Thanks, team. Great numbers. Mary, I just want to shift gears and talk maybe advanced ADAS and software really quickly. Super Cruise, you introduced in 2018. You don’t put out too many usage numbers, but I think in the middle of last year, you talked about almost 100 million miles [indiscernible]. Even if we double that for time passage, it’s not many vehicles, tens of thousands. We also read Ultra Cruise has now been installed. Just high level, isn’t this a very slow pace for Level 2+ product? Tesla has been providing for a decade charging anywhere from 6,000 to 12,000 for top versions. I guess the question is, isn’t this becoming a big miss opportunity for GM at this point for additional revenue? Even Slide 7, I think, only shows one of the ICE launches, the Traverse highlighting Super Cruise. So just a broad update when we could start to see what is a technology probably everyone wants at more sort of mass deployment scale across your fleet?
Mary Barra: Yes. Chris, appreciate the question. I think back in the 2018 time frame, I think we should have, in hindsight, put it across the portfolio much more quickly. It’s not a number of models. I don’t have it off the top of my head. Ashish, we can provide that. But it’s on a number of models across the portfolio right now. As we launch the Traverse this year will be added to the Traverse. Again, we’re seeing extremely strong response from customers where I think it’s over 80%, 85% of customers once they experience the technology say they would never — they would not want a car without it or they would strongly prefer it on their vehicle, which, in my experience, is a pretty high interest rate for a single technology.
So we’re committed. We’re going to continue to develop. And we have been, along the way, adding more roads and adding more capability, whether it’s lane change, whether it’s trailering. So there’s a robust plan to continue to improve Super Cruise, and we’ll stay on that. And we are seeing the profitability benefits. And the more vehicles to your point, we get it on, the better it will be. And we’re committed to do that. And frankly, have done quite a bit already. And we can provide that.
