GM's Q1 2026 Earnings Call

[00:00:00] Good morning and welcome to the General Motor Company first quarter 2026 earnings conference call. During the opening remarks, all participants will be in listen-only mode. After the opening remarks, we will conduct a question and answer session. As a reminder, this call is being recorded on Tuesday, April 28, 2026. I will now turn the call over to Ashish Kohli, GM's Vice President of Investor Relations. Ashish Kohli, GM's Vice President of Investor

[00:00:29] Financial. We appreciate you joining us as we review GM's financial results for the first quarter of 2026. Our conference call materials were issued this morning and are available on GM's Investor Relations website. We are also broadcasting this call via webcast. Joining us today are Mary Barra, GM's Chair and CEO, along with Paul Jacobson, GM's Executive Vice President and CFO. Susan Sheffield, President and CEO of GM Financial, will also be joining

[00:00:58] us for the Q&A portion. On today's call, management will make forward-looking statements about our expectations. These statements are subject to risks and uncertainties that could cause our actual results to differ materially. These risks and uncertainties include the factors identified in our filings with the SEC. Please review the safe harbor statement on the first page of our presentation

[00:01:19] as the content of our call will be governed by this language. Hello everyone and welcome to Kelowatta podcast about electric vehicles, renewable energy, autonomous driving, and much, much more.

[00:01:48] My name is Bodhi and I am your host. And on today's episode, we have GM's Q1 2026 earnings call. In addition to that, it's June 9th, which is Rivian's R2 day. They're delivering Rivian R2s today. Today's the launch day. I think that's what I meant to say. Today's the launch day for the Rivian R2.

[00:02:12] So, yeah, that's exciting. I haven't been outside today other than just around my neighborhood to go for a run. So I'm looking forward to seeing if there's any R2s floating around in the Tempe Phoenix area. I'll let you know when I spot one. But I think that's it. Let's go ahead and dive into Mary Barra's

[00:02:34] opening remarks. Just like every earnings call that I talk about, I edit it for this show. So there may be things that are put together that sound like she said it all at one time, but they could happen in very different places in the earnings call. So if you want the full earnings call, I'll put a link in the show notes. But I do my best to represent it in the way that it was

[00:02:59] meant to be. I don't try to edit it in a way that sounds worse or better than it is. This is really more, does this information make sense for the show? Is it informative for folks who listen to the show? And then I can present it to you in a way that doesn't have all of the added stuff of actual earnings calls, which sometimes are very interesting and sometimes could be a little mind

[00:03:26] numbing. So let's go ahead and jump into Mary's opening remarks. We're also building tremendous momentum in digital services. They are playing an increasingly important role in our success, and they will drive even stronger results in the future. If you look deeper at our results, especially in North America, you can see how the depth and breadth of our vehicle portfolio is driving the business. Even with tight inventory, we continue

[00:03:52] to lead the industry in the U.S. and Canada, and we're number two in Mexico. We also continue to lead in full-size pickup sales and share with 42% of the U.S. market. In addition, we were number one in fleet, including commercial deliveries, and we were number two in EVs. As we exited the quarter, our EV market share in the U.S. was 13%, up from about 10% in December 2025, which underscores the

[00:04:18] appeal of our portfolio as the segment stabilizes. Okay, so this is really the most that GM is going to say about their electric vehicles. They're going to talk a lot about services. They're going to talk a lot about GM or Super Cruise, not GM Cruise, but Super Cruise. When I say a lot, a lot more than they did about EVs, but it was a lot of the questions this earnings call were about things like their new

[00:04:46] pickup truck platform that they're working on, which has nothing to do with EVs. There's just people were curious about it. So I decided to focus mostly for this particular earnings call on the services and Super Cruise, although there is some where it made sense, some EV stuff peppered in there, but honestly, not a lot of breath was wasted on EVs. We'll just put it that way. All right, let's move on

[00:05:15] to our next clip, which will be about, surprisingly enough, digital services. All of these winning vehicles are laying the groundwork for higher company-level profitability around the world through durable, reoccurring digital revenue streams. We are on pace to add more than 1 million OnStar subscribers in 2026, with about 30% of our existing customers choosing a premium plan. Outside of the U.S. and Canada, we have more than 20 revenue-generating markets

[00:05:42] and regions, including Mexico, Brazil, China, South Korea, and the Middle East. Within the OnStar platform, Super Cruise is also scaling quickly. Our customers have now driven 1 billion hands-free miles, and our subscription performance is on pace to exceed 850,000 subscribers by the end of the year, with strong renewal trends in the 30% to 40% range. You will find that our attach rates, subscription renewals, and revenue generation compare favorably to others in the industry.

[00:06:11] The continued growth of this ecosystem, including the customer base, miles traveled, and the insights we're gaining to train our AI models will help pave the way for our eyes-off, hands-off technology launching in 2028 on the Cadillac Escalade IQ.

[00:06:26] Okay, so it doesn't sound like every GM car comes with Super Cruise. It sounds like when you order your car, when the car gets built, it's built with all of the components needed for Super Cruise. I could be wrong on that, but I'm sure that I feel confident that they said this later in the earnings call, and we'll go back and listen to it, because I listened to this, and then I cut it all up, and then now I'm actually doing the show.

[00:06:54] So I'll have to go back and make sure that that's correct. But when we get to that part, I'll let you know. But that's different than, say, Rivian or Tesla, because they have every car they built has the capability. Well, I mean, Rivian, every new car that they build has this capability or potential capability of autonomous driving, right? Wherever it lands on the spectrum of autonomous driving.

[00:07:19] But it doesn't sound like that's how GM is doing business. However, when you buy a GM car, and it comes equipped with all the hardware, and you get, I think, three years of autonomous driving for free, and then after that, you have to pay for it. And as we'll hear later in the call, a fair number of people are finding enough value in it that they are continuing to pay for the subscription service.

[00:07:46] Now, when the Cadillac IQ comes out, you know, whenever in 2027, 2028, whatever Mary said it was, then we'll really see if GM could actually produce on their claims of, you know, hands-free, eyes-free autonomous driving. We'll see. I am skeptical of that. But let's go ahead and learn a little bit more about the autonomous driving in this next clip.

[00:08:15] The Escalade IQ is just the start. We are doing something unique in the autonomous space, which is developing a system for personal vehicles that we can deploy on both ICE vehicles and EVs and scale across multiple brands and price points. We're stress testing it in the digital environment capable of simulating roughly 100 years of human driving every single day. We recently took the next step and began supervised on-road testing in California and Michigan.

[00:08:41] The way we're building this technology is a reflection of how seriously we're embracing AI across the enterprise. Today, nearly 90% of the code written by our autonomy team is generated by AI. More than I would normally expect to hear about AI in a GM earnings call. I just, not, you know, not that important.

[00:09:06] Everybody's kind of talking about it, but yeah, we'll kind of keep an eye on this and see where it goes. I fully expect to be doing this podcast in 2028. So I will be interested to see if they're actually able to achieve the full level three autonomy like they're saying they can. I don't think they're doing anything different than other companies, but I just thought it was interesting. All right, let's move on.

[00:09:33] Paul, which Paul, I'm blanking on his last name. He is the CFO for GM. And we are going to move to some of his opening remarks. So let's go ahead and dive in and hear what he has to say. Let's turn next to an update on our EV charges. Last year, as you know, we reassessed our EV capacity and manufacturing footprint to better align with softer demand and elimination of U.S. tax incentives.

[00:10:03] As previously indicated, we are transitioning Orion Assembly from EV to ICE production and resolving associated supplier contracts. With the exception of the BrightDrop EV van, we have not recorded impairments to our current EV portfolio. Our focus remains on improving EV profitability and scaling our business as market adoption grows, albeit at a slower expected pace than we had previously seen.

[00:10:29] In the second half of 2025, GM recorded a total of $7.6 billion in EV-related charges. This breaks down into $4.6 billion of estimated cash charges and $3 billion in non-cash impairments. In the first quarter, we took an additional $1.1 billion in EV charges, driven mainly by contract cancellations and supplier commercial claims. We expect about $1 billion of this will have a future cash impact.

[00:10:58] We're moving quickly to finalized claims. To date, we've already recorded around 90% of the expected total supplier commercial claim costs, and we anticipate reaching agreements in principle on most of the remainder during the second quarter. Separately, we continue to work expeditiously through right-sizing our battery supply chain with our joint venture partners. Of the total $5.6 billion in EV-related cash charges recorded since the second half of 2025,

[00:11:27] $2.6 billion has been paid as of March 31. In April, we've already paid an additional $600 million, and we continue to expect most of the remaining cash flows to occur in 2026. We remain steadfast in our desire to get these claims resolved quickly and fairly for our business partners and our shareholders. For EVs, we expect volumes to be lower as the market shows early signs of stabilizing around 6% of U.S. industry sales.

[00:11:56] We continue to expect a benefit of $1 to $1.5 billion for the calendar year as we right-size our EV capacity and run at substantially lower EV wholesale volumes. The production pause at Ultium cells means lower benefits from production tax credits flowing through material costs, but this is largely offset by positive inventory adjustments from lower cell inventory levels.

[00:12:20] On regulatory costs, we continue to expect a $500 to $750 million tailwind year over year. The endangerment finding repeal in February was already assumed in our plan. All right. I don't have much to add on this other than, you know, they decided to pivot away from EVs a little bit because of, you know, all the reasons that they said.

[00:12:46] And that has a cost associated with it because they have contracts with suppliers and such. So, yeah, I mean, I don't know. In my heart, it's a little disappointing, but in reality, it's just probably business as usual. All right. Let's move on to our next clip. Oh, by the way, we're done with opening remarks and we're now on to analyst questions. All right. Let's go ahead and listen in. Thank you.

[00:13:14] The next question comes from Emmanuel Rosser with Wolf Research. Your line is open. Great. Thank you so much. Good morning. So, quite an uncertain environment as you certainly, you know, indicated. I was curious in terms of the factors you're monitoring, you indicated, you know, you'd want a little bit more clarity on some of those before making any additional changes to the outlook.

[00:13:41] In terms of things that could move the needle for this year that you're monitoring, is it more on the demand side, vehicle mix, input cost? I'm curious, which are the ones that, you know, could still, you know, move up or down, you know, the most and impact you? Well, Emmanuel, I think the number one thing that we're watching is, you know, what happens from with the Iranian conflict.

[00:14:05] Because obviously, you know, with oil prices affect a lot more, you know, that we're seeing from not only logistics, but also other commodity costs. So if the conflict ends in a shorter period of time, I think we'll see a return back to normal levels. If it stays on longer, tell me how high oil prices go before we'll start talking about what demand is.

[00:14:33] But I also want to remind you that we're, although we have an incredibly strong truck franchise, and I'm very excited about the new truck that we have coming out at the end of the year, we also have a very strong midsize crossover portfolio and small crossover portfolio, as well as a strong midsize truck. So I think we're well prepared with, you know, a portfolio I'd stand against anyone when we look at how consumer behavior might shift, depending on how long the war lasts, but we just don't know.

[00:15:03] So I think those are the primary things that we're watching. And as Paul said, we looked at the year, seen that uncertainty, especially as the conflict began, and that's why we started to really work on cost management. There's other areas that we're working on to continue to do that. But I think the biggest variable that we're looking at is how long does the conflict last and what does it cause from a cost perspective across logistics supply chain

[00:15:28] and if it ends up having anything, any impact on a shift in mix. But to date, we really haven't seen that. So I want to remind everybody that this was recorded, like, I think on August 28th or April 28th or something like that. So it was a few weeks ago. So the conflict with the United States, Iran and Israel really hadn't been going on for as long as it's currently going on, for sure.

[00:15:54] So when we listened to that clip, we should remember back to the late April and what was going on then because there was still a lot of unknowns. I'm sure Mary's answer would have been very different had it been answered or had the question been asked yesterday. Right. So I want to make sure that's that's very clear. But the second thing is notice she didn't say anything about EVs in that answer.

[00:16:25] She did say, like, they have crossovers and things like that to help weather the, you know, higher gas prices and things like that. But she didn't say anything about, hey, we have a whole bunch of EVs, especially on the Cadillac side that people could buy. No mention of EVs in that answer. Let's go ahead and move on to our next question, which is about Super Cruise. Thanks for that, Paul. My other question was on Super Cruise and the digital services.

[00:16:55] For the strong growth that GM has been seeing in Super Cruise and the willingness for consumers to subscribe after the prepaid subscriptions last, can you speak a bit more on the breadth of that consumer demand? And is it concentrated in the higher end parts of the portfolio like Cadillac? Or is GM seeing consumer demand for those solutions more broadly? So what I would say, Mark, you know, we're continuing to trend at about that 40 percent attachment rate after the subscription period. And, you know, we do it differently, right?

[00:17:24] Other competitors that put the hardware on every vehicle and they're bearing that cost for us. It's consumers who have purchased Super Cruise. They prepaid for a three-year period. And we see that in terms of the hardware costs. So we have the deferred revenue that comes with the vehicle. And then we have the subscription afterwards. So we're starting to see escalation in terms of the number of vehicles that are coming off of that three-year prepaid period.

[00:17:52] And we're still holding attachment rates in that 40 percent range. So we're very optimistic about what that means. And I think that's what I was adhering to in the earlier question of, you know, when you look at the ARPU, you've got to really take into account the scale advantage that we have, especially as we start growing into SDV 2.0 and expanding that across the portfolio. But Super Cruise is a really strong leading indicator.

[00:18:17] And we're continuing to invest in delivering more value to customers that we think are going to make that even more attractive in the future. 40 percent attachment rate seems good, right? It is worth noting that Super Cruise, after the three-year period, either costs $40 a month or you get a little break if you pay it for a year, which is $400. Which is, you know, cheaper than what Rivian's charging.

[00:18:43] I think Rivian's is $50 a month or $2,500 a year or $2,500 if you want to buy it outright. And, you know, Tesla's obviously $100 a month. So I don't think their pricing is unreasonable. And that probably goes to the higher take rate of 40 percent. So, you know, it's not. Is that like out of this world crazy numbers?

[00:19:14] No. But it's, you know, GM's a big company. It's not crazy for one customer. But when you have as many customers as GM does, it's probably pretty decent money for them. All right. Yet another question here about digital services in our next clip. So let's listen in on that. Just going back to the digital services. I think you said that you expect margins to be in line with other software companies.

[00:19:44] When will we see those types of margins? I don't know if we're there yet now or not. Or if there are upfront costs you take. How does that cost-last revenue curve look out over the next two to three years? Yeah. So, Mike, this gets a little bit technical. I'll try to summarize it as best I can. But, you know, when we sell a vehicle with Super Cruise, all the hardware gets expensed right away. And then the revenue associated with that gets deferred over the three-year trial period.

[00:20:13] So that's coming on at a very, very sizable margin because we've already recognized the costs in that going forward. And then when you look at the other digital services and OnStar, there are some hardware costs, et cetera, that are expensed with the vehicle. There are some service costs that go in. So the margins aren't, you know, quite as robust as if you expense everything because there are service costs associated with it. But they're still pretty sizable.

[00:20:40] So as we ramp up that deferred revenue base and it starts to amortize into the P&L at increasing rates, that's where you start to see the impact. And, you know, what we talked about, if you go back to Investor Day several years ago, you know, we talked about that having an impact and growing to a point where it has an impact on the overall margins of the company. And we're starting to see that take hold.

[00:21:05] And we've got a lot of excitement about the potential of what SDV 2.0 and the future improvements to Super Cruise and ultimately autonomy can do for us when you look at it across scale. Okay. First thing, I misunderstood this clip when I first heard it. I thought he was saying that only certain company or only certain cars were sold with the Super Cruise hardware installed.

[00:21:34] And that's not what he's saying at all. So when I said that earlier in the podcast, that this is me correcting that because that is incorrect. All right. Now, having said that, I think services, I think car companies that sell very expensive vehicles, and you can argue that a $30,000 vehicle is affordable, but it's also a pretty expensive vehicle.

[00:22:03] And then to sell services on top of that, like, you know, subscription services on top of that, I think that's a very fine line to dance, right? We know about, I think it was Mercedes or BMW that was selling the heated seats, which, you know, already came with the car. Like, the hardware for heated seats is in the car, and they were charging a subscription for the heated seats to activate it. That kind of thing can go poorly very quickly.

[00:22:32] But I think GM has managed this pretty well. I think Tesla does a good job of it, too, although I'd still argue that $99 for FSD, especially if you have a hardware 3 vehicle, is too much money because you are not getting the same value out of your hardware 3 vehicle that you are out of a hardware 4 vehicle, for instance, or AI4, AI3, whatever.

[00:22:54] But I do think that, you know, GM, Tesla, Rivian, and other companies as well are offering subscriptions that are not pickpocketing people for features that they should already have in the car anyway.

[00:23:16] So, I know GM has taken a lot of lumps when it comes to their software package that they built with Google Auto. No, not Google Auto, excuse me, Google built in. I know that GM's taken a lot of grief for getting rid of Android Auto. There we go. And Apple CarPlay. And you can argue that that's going to hurt them in the long run.

[00:23:46] It doesn't seem to hurt them very much, honestly. But if they were to get a little bit more aggressive with their subscriptions, I think that would hurt them. But right now, I think GM is doing a really good job of kind of walking that tightrope. All right. We have yet another question on digital services. So, let's listen in. Thank you. The next question comes from Andrew Percoco with Morgan Stanley. Your line is open.

[00:24:17] Great. Good morning, guys. Thanks. Thanks so much for taking the question. I want to start on the digital services. I appreciate the added disclosure you guys have started to give here. But if I look at the 13 million or so subscribers that you're targeting by your end, you know, you've also got, I think, 45 to 50 million vehicles on road. So, I'm just curious.

[00:24:41] How do you tap into that, you know, 35 to 40 million other vehicles that don't currently have any subscriptions to these digital services? Is there a hardware limitation? I know there might be some limitations around supervision. But outside of supervision, what's the opportunity to get some of those customers into some of these higher value digital services? Yeah. Thanks, Andrew. Appreciate that.

[00:25:03] So, you know, I think when we talk about the car park that's out there in the universe of GM vehicles, that really is meant to, excuse me, signal the opportunity that exists going forward. So, as we continue to put SDV 2.0 and other capabilities, many of the vehicles that are out there today don't have the hardware capabilities to be able to deliver that. So, we're looking at that as growth potential and really sizing the box for the future as we continue to expand that.

[00:25:31] So, you know, we do have, like I said before in response to the other question, you know, with Super Cruise, it really is a case where the hardware is on there for people that buy it. You know, as we continue to get the cost down, we can look to potentially approach the market differently on that. We can look to be able to move to the future of the future. So, you know, the world's going to be able to see the price of the market. So, what do we need to do with the future of the future?

[00:26:01] Got it. That makes sense. And that's super helpful. And I guess there's a follow-up question to that. I think Super Cruise is available on, I think, 750,000 miles of roads in the U.S. What's some of the gating factors in expanding that? Is it regulatory? Is it your own kind of risk appetite? Just help us think through what some of the kind of gating factors are there. Thank you.

[00:26:29] It really is, as the company looks, it's both from, in many cases, you know, we have LIDAR map with the current system. But, and it's also, you know, we've really focused on highway and major roads. And so it's a focus that we continue to look at how we expand. And as you've seen from when we first launched Super Cruise and it started on a certain amount of roads, we continue to expand that over time. So we are now on additional roads, not just highways.

[00:26:58] And we'll continue to look at the opportunities to do that and making sure we do the technology correctly. Because one of the things we're most proud of from a Super Cruise perspective is it's viewed as extremely safe. And the customers, you know, we're building a lot of trust with Super Cruise as we do that, which I think will also play well as we launch our next generation. With the Escalade IQ, with the eyes off, hands off.

[00:27:26] Again, you know, the Escalade IQ is coming in 2028. A lot of, the IQ is going to be expensive. It's not going to be a cheap car that most people can afford. I'm sure, not I'm sure, that technology for the, that comes in the IQ first will trickle down to all the other models eventually. Who knows if it will actually be in 2028 or if it's just going to be a few vehicles in, you know, in the, in the IQ.

[00:27:53] When I say a few, like, again, it's going to be expensive cars. So it's not going to sell as many as like the Equinox, for instance. So, um, I think that's a, that's a, an easy way, I guess, for GM to kind of test this kind of technology, uh, uh, in, in the similar way that Tesla's doing it. By saying that, I mean, with customers paying for it.

[00:28:21] Um, and then, you know, I, it's, it's one of those things where this is obviously a different philosophy philosophy from what Tesla is saying. And I'm sure it's probably a little different than what, uh, Rivian is doing. So we'll just kind of have to pay attention, pay closer attention to these companies as they roll this stuff out, you know, eyes off, hands off in 2028. Again, I, I'm skeptical that that's going to be a thing.

[00:28:49] Uh, it could be, not saying it won't be, it's just, that seems too close. Seems too soon to get, to get that, but it could be eyes off, hands off for this stretch of road that's largely straight, you know, um, that in Arizona, for instance, it gets, you know, 90 some percent of the days of the year are sunny. Sure.

[00:29:15] Maybe that, that, that will work in that situation, but for a place like Northern Michigan or, you know, in the Northeast, Eastern part of the United States where, um, they get more inclement weather than what we see here or in Ireland for that, that matter, or the UK, that part of the world, uh, we don't, we don't really see that much rain here in Arizona compared to other States like that. So, you know, I don't know. I'm just skeptical.

[00:29:45] So we'll, we'll just, we'll see how it goes. I'm hopeful for sure. But, uh, yeah, I'm sure there'll be lots of caveats for that eyes off, hands off level three driving. All right. So that is all of the questions. Uh, next, we're just going to hear Mary Barra's closing remarks, and then, uh, that's going to end the show. So I let Mary have the, the last word.

[00:30:13] If you want to support the show, you can do so. You can go to support kilowatt.com and you can choose from either, um, supercast. I was trying to say supercast, but in my brain, it was super cruise. You can choose from supercast or Patreon, whichever one you, um, like the best. And you can support the show for as little as a dollar.

[00:30:42] I try to make it very affordable for everybody to support the show. You get an ad free experience and all the money that you spend, uh, supporting the show goes back into the show. None of that money goes into my pocket. So you are truly supporting the show by doing that. You can also email me if you're wanting to respond to this or needs call and be like, what the heck? There's hardly any EV stuff. I do want to remind you autonomous driving is in the intro.

[00:31:11] Um, you can do so it's Bodie B O D I E at nine one eight digital.com. And, uh, if you want to follow me on LinkedIn, you can do so. Oh man, I, this is so, uh, the car stuff podcast with Tom Appel and Jill Simonello, they had on somebody from scout and I have not had a chance to listen to the episode yet. Uh, but they had on, let's see.

[00:31:42] Sorry. Let me look this up here. This is not me being very professional. Um, they had on Ryan Decker from scout motors and, um, they talk about scouts launch and what to expect and all that other stuff. So I would highly encourage you to go to car stuff podcast. I'll put a link in the show notes as well.

[00:32:10] I, I love their podcast. They, they talk about more than just the EVs, but it, it is a great podcast. So I highly encourage you to go check it out. Jill's been on the show before and hopefully someday soon we'll have Tom on as well. All right, everybody. Uh, let's go ahead and let Mary Barra close us out. Thank you. I'd now like to turn the call over to Mary Barra for her closing comments. Well, um, thank you. And thanks to everybody for your questions.

[00:32:38] I hope you see that we're, um, clearly operating in a very dynamic environment, but that's not unusual for the industry. And that's why we have a multi-year focus to ensure we have the right products, the right team, and a strong balance sheet supported by healthy cash flows to achieve our long-term goals and execute on our capital allocation strategy, regardless of the short-term volatility or longer-term cyclicality. To sum it up, we're executing well against our plan and we've shown quarter after quarter

[00:33:08] that we have durable earnings. We're growing our software revenue. We're disciplined with our capital allocation and we have multiple paths to profitable growth. We have strong momentum in the core business thanks to our broad and deep portfolio of vehicles. We've remained focused on delivering eight to 10% North American margins this year. Our on-star digital business, which includes Super Cruise, is contributing, uh, to high margin revenue growth. And I'll remind everyone that is not cyclical.

[00:33:34] And we're advancing, uh, automated driving technology in a way that separates GM from other companies. Finally, we're addressing the near-term cost, uh, impacts of higher costs and we're prepared to respond quickly and strategically as the market, uh, continues to develop. So once again, thank you for joining us and I hope everyone has a good day.

[00:34:11] That concludes the conference call for today. Thank you for joining.