Chairman & Chief Executive Officer, General Motors Co
GM's Q1 2026 Earnings Call | Kilowatt: A Podcast about Electric Vehicles
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In this episode, we dive deep into General Motors’ first quarter 2026 earnings call to unpack the automaker’s latest financial performance, changing market position, and strategic outlook. We dissect GM's robust sales performance in North America and track its growin...
About Mary Barra
In the first half of 2026, Mary Barra discussed General Motors’ financial performance and strategic priorities during the company’s Q1 earnings call and in media interviews. She stated that GM was “executing well against our plan” and had “durable earnings,” citing a first-quarter EBIT-adjusted margin of 10.1% in North America, which included a benefit from a tariff adjustment. Barra noted that GM was raising its full-year EBIT-adjusted guidance by $500 million to a range of $13.5 billion to $15.5 billion, while also addressing higher costs linked to the conflict in Iran. She said the company was “prepared to respond quickly and strategically” to market developments and emphasized a multi-year focus on products, team, and balance sheet strength. Barra also spoke about the role of artificial intelligence at GM, describing an AI tool that allows designers to estimate aerodynamics on concepts in minutes rather than weeks. She said AI is a way to “give the tools to the people to be able to do better work” and that it is “hard to predict” whether AI will create more jobs than it replaces. On competition with China, Barra called for a “level playing field,” including “equivalent tariffs” and an end to what she described as unfair Chinese government subsidies, and she raised national security concerns about connected technology. Regarding consumer demand, she said GM was not seeing customers pull back on purchases or fall behind on auto loans, and that the company offers six models starting under $30,000.
Transcript (34 segments)
✨ AI-enhanced transcript with speaker attribution
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Narrator0:01
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Operator1:15
Good morning and welcome to the General Motors Company first quarter 2026 earnings conference call. During the opening remarks, all participants will be in listen 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 would now turn the call over to Ashish Kohley, GM's Vice President of Investor Relations.
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Ashish Kohley1:43
Thanks, Denise, and good morning, everyone. 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 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 actual results to differ materially. Please review the safe harbor statement on the first page of our presentation as the content of our call will be governed by this language.
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Bodie2:56
Hello everyone and welcome to the Kelloda podcast about electric vehicles, renewable energy, autonomous driving, and much more. My name is Bodie and I am your host. On today's episode we have GM's Q1 2026 earnings call. It's also June 9th, which is Rivian R2 launch day — they're delivering Rivian R2s today, which is exciting. I haven't been outside today other than to go for a run around my neighborhood, so I'm looking forward to seeing if there are any R2s floating around in the Tempe, Phoenix area. I'll let you know when I spot one. Let's go ahead and dive into Mary Barra's 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. If you want the full earnings call, I'll put a link in the show notes. I don't try to edit it in a way that sounds worse or better than it is. This is really more about whether this information makes sense for this show and is informative for folks who listen. So let's go ahead and jump into Mary's opening remarks.
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Mary Barra4:48
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 to lead the industry in the US 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 US 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 US was 13%, up from about 10% in December 2025, which underscores the appeal of our portfolio as the segment stabilizes.
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Bodie5:38
This is really the most that GM is going to say about their electric vehicles. They're going to talk a lot about services and Super Cruise — a lot more than they did about EVs. A lot of the questions this earnings call were about things like their new pickup truck platform, which has nothing to do with EVs. People were just curious about it. So I decided to focus mostly on the services and Super Cruise for this particular earnings call, although there is some EV stuff peppered in where it made sense. Honestly, not a lot of breath was wasted on EVs. Let's move on to our next clip, which will be about digital services.
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Mary Barra6:36
All of these winning vehicles are laying the groundwork for higher company-level profitability around the world through durable, recurring 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 US and Canada, we have more than 20 revenue-generating markets 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. 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.
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Bodie7:41
It doesn't sound like every GM car comes with Super Cruise. It sounds like when you order your car and it gets built, it's built with all the components needed for Super Cruise. I could be wrong on that, but I feel confident they said this later in the earnings call. But that's different than say Rivian or Tesla, because every car they build has the capability of autonomous driving, right? 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, you get three years of autonomous driving for free, and then after that you have to pay. As we'll hear later in the call, a fair number of people are finding enough value that they continue to pay for the subscription. When the Cadillac IQ comes out in 2027 or 2028, we'll really see if GM can produce on their claims of hands-free, eyes-free autonomous driving. I'm skeptical of that. Let's learn more about autonomous driving in this next clip.
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Mary Barra9:31
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 a hundred years of human driving every single day. We recently took the next step and began supervised on-road testing in California and Michigan. 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.
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Bodie10:10
More than I would normally expect to hear about AI in a GM earnings call. Not that it's not important — everybody's talking about it. We'll keep an eye on this and see where it goes. I fully expect to be doing this podcast in 2028, so I'll be interested to see if they're actually able to achieve the full level three autonomy they're claiming. I don't think they're doing anything different than other companies, but I thought it was interesting. Paul Jacobson is the CFO for GM, and we're going to move to some of his opening remarks.
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Paul Jacobson11:06
Let's turn next to an update on our EV charges. Last year, we reassessed our EV capacity and manufacturing footprint to better align with softer demand and elimination of US tax incentives. 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. In the second half of 2025, GM recorded a total of $7.6 billion in EV-related charges — $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. We're moving quickly to finalize claims — we've already recorded around 90% of the expected total supplier commercial claim costs and anticipate reaching agreements on most of the remainder during Q2. Of the total $5.6 billion in EV-related cash charges since the second half of 2025, $2.6 billion has been paid as of March 31. In April, we've already paid an additional $600 million. For EVs, we expect volumes to be lower as the market shows early signs of stabilizing around 6% of US industry sales. We continue to expect a benefit of $1 to $1.5 billion for the calendar year as we rightsize EV capacity. On regulatory costs, we continue to expect a $500 to $750 million tailwind year-over-year.
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Bodie13:48
I don't have much to add on this other than since they decided to pivot away from EVs a little bit, that has a cost associated with it because they have contracts with suppliers. In my heart it's a little disappointing, but in reality it's probably just business as usual.
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Narrator14:19
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Bodie15:49
All right, let's move on to our next clip. By the way, we're done with opening remarks and we're now on to analyst questions. Let's go ahead and listen in.
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Operator15:59
Thank you. The next question comes from Emanuel Rosner with Wolf Research. Your line is open.
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Emanuel Rosner16:07
Great, thank you. Good morning. Quite an uncertain environment as you certainly indicated. I was curious in terms of the factors you're monitoring — you indicated you want a little more clarity on some of those before making additional changes to the outlook. In terms of things that could move the needle for this year, is it more on the demand side, vehicle mix, input cost? I'm curious which ones could move up or down the most and impact you.
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Mary Barra16:43
Well Manuel, I think the number one thing we're watching is what happens with the Iranian conflict, because oil prices affect a lot more than we're seeing from not only logistics but also other commodity costs. If the conflict ends in a shorter period of time, I think we'll see a return to normal levels. If it stays on longer, tell me how high oil prices go before we start talking about what demand is. But I also want to remind you that although we have an incredibly strong truck franchise and I'm very excited about the new truck 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 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. As Paul said, we looked at the year seeing that uncertainty, especially as the conflict began, and that's why we started to really work on cost management. The biggest variable we're looking at is how long the conflict lasts and what it causes from a cost perspective across logistics and supply chain, and if it ends up having any impact on a shift in mix. But to date, we really haven't seen that.
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Bodie18:22
I want to remind everybody that this was recorded on April 28th, so it was a few weeks ago. The conflict with the United States, Iran, and Israel really hadn't been going on for as long as it currently has. When we listen to that clip, we should remember back to late April and what was going on then, because there were still a lot of unknowns. I'm sure Mary's answer would have been very different had the question been asked yesterday. The second thing is, notice she didn't say anything about EVs in that answer. She mentioned crossovers and things to help weather higher gas prices, but no mention of EVs — like, hey, we have a whole bunch of EVs especially on the Cadillac side that people could buy. No mention of EVs. Let's move on to our next question, which is about Super Cruise.
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Mark19:36
Thanks for that, Paul. My other question was on Super Cruise and the digital services. For the strong growth that GM has been seeing in Super Cruise and the willingness for consumers to subscribe after the prepaid subscriptions lapse, could you speak a bit more on the breadth of that consumer demand? Is it concentrated in the higher-end parts of the portfolio like Cadillac, or is GM seeing demand more broadly?
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Mary Barra20:00
What I would say, Mark, is we're continuing to trend at about that 40% attachment rate after the subscription period. We do it differently — other competitors have 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 cost. So we have the deferred revenue that comes with the vehicle and then the subscription afterward. We're starting to see escalation in terms of the number of vehicles coming off that three-year prepaid period and we're still holding attachment rates in that 40% range. We're very optimistic about what that means. That's what I was alluding to in the earlier question — when you look at the ARPO, you've got to take into account the scale advantage we have, especially as we start growing into SDV 2.0 and expanding across the portfolio. Super Cruise is a really strong leading indicator and we're continuing to invest in delivering more value to customers that we think will make that even more attractive in the future.
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Bodie21:11
40% attachment rate seems good. It is worth noting that Super Cruise after the three-year period either costs $40 a month or you get a break if you pay annually at $400, which is cheaper than what Rivian charges — I think Rivian says $50 a month or $2,500 a year, or $2,500 outright. And Tesla's obviously $100 a month. I don't think GM's pricing is unreasonable, and that probably contributes to the higher take rate of 40%. It's not out-of-this-world crazy numbers, but GM is a big company — when you have as many customers as GM does, it's probably pretty decent money for them. Yet another question about digital services in our next clip.
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Mike22:20
Just going back to the digital services. I think you said you expect margins to be in line with other software companies. When will we see those types of margins? Are we there yet, or are there upfront costs you take? How does that cost-revenue curve look out over the next two to three years?
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Paul Jacobson22:44
Yeah, Mike, this gets a little technical but I'll try to summarize it the best I can. 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. So that's coming on at a very sizable margin because we've already recognized the costs going forward. When you look at the other digital services and OnStar, there are some hardware costs expensed with the vehicle and some service costs that go in. So the margins aren't quite as robust, but they're still pretty sizable. 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. We talked about this at Investor Day several years ago — that having an impact and growing to a point where it affects the overall margins of the company. We're starting to see that take hold. 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 across scale.
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Bodie24:02
First thing — I misunderstood this clip when I first heard it. I thought he was saying only certain cars were sold with Super Cruise hardware installed, and that's not what he's saying at all. When I said that earlier in the podcast, this is me correcting that, because that is incorrect. Having said that, I think services on top of very expensive vehicles is a very fine line to dance. We know about Mercedes or BMW selling heated seats as a subscription when the hardware already came with the car — that kind of thing can go poorly very quickly. 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 Full Self-Driving on a Hardware 3 vehicle is too much money because you're not getting the same value as out of a Hardware 4 vehicle. But I do think GM, Tesla, Rivian, and other companies are offering subscriptions that aren't pickpocketing people for features they should already have. GM has taken a lot of grief for getting rid of Android Auto and Apple CarPlay — you could argue that's going to hurt them, but it doesn't seem to hurt them very much honestly. If they were to get more aggressive with subscriptions, I think that would hurt them. Right now, I think GM is doing a really good job of walking that tightrope.
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Narrator26:49
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Operator27:25
Thank you. The next question comes from Andrew Peroko with Morgan Stanley. Your line is open.
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Andrew Peroko27:33
Great, good morning, guys. Thanks so much for taking the question. I want to start on the digital services. I appreciate the added disclosure you've started to give here. If I look at the 13 million or so subscribers you're targeting by year-end, you've also got 45 to 50 million vehicles on the road. How do you tap into that 35 to 40 million other vehicles that don't currently have any subscriptions to these digital services? Is there a hardware limitation? Outside of Super Cruise, what's the opportunity to get some of those customers into higher-value digital services?
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Paul Jacobson28:16
Thanks, Andrew. When we talk about the car park that's out there in the universe of GM vehicles, that really is meant to signal the opportunity that exists going forward. As we continue to put SDV 2.0 and other capabilities, many of the vehicles out there today don't have the hardware capabilities 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. With Super Cruise, the hardware is on there for people that buy it. As we continue to get the cost down, we can look to potentially approach the market differently on that. But we see a ton of potential here because we're already driving approximately $7.5 billion of deferred revenue by the end of this year with what we have. It really speaks to the opportunity ahead of us.
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Andrew Peroko29:18
Got it, that makes sense and is super helpful. As a follow-up, Super Cruise is available on about 750,000 miles of roads in the US. What are some of the gating factors in expanding that? Is it regulatory? Is it your own risk appetite? Help us think through what the gating factors are there.
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Mary Barra29:45
It really is both. In many cases, we have mapped the roads with the current system, and it's also that we've really focused on highways and major roads. It's a focus we continue to expand. As you've seen from when we first launched Super Cruise and it started on a certain amount of roads, we continue to expand over time. We are now on additional roads, not just highways. We'll continue to look at 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. We're building a lot of trust with Super Cruise, which I think will also play well as we launch our next generation with the Escalade IQ with the eyes-off, hands-off technology.
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Bodie30:42
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 the technology 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 the IQ. Again, it's going to be an expensive car so it's not going to sell as many as the Equinox. I think that's an easy way for GM to test this kind of technology, similar to how Tesla does it — by having customers pay for it. This is obviously a different philosophy from Tesla and probably a little different from what Rivian is doing. We'll just have to pay closer attention as these companies roll this stuff out. Eyes off, hands off in 2028 — again, I'm skeptical that's going to be a thing. It could be, not saying it won't be, it just seems too soon. But it could be eyes off, hands off for a stretch of road that's largely straight. In Arizona, 90% of the days of the year are sunny — sure, maybe that works in that situation. But for northern Michigan or the northeastern United States where they get more inclement weather, we don't see that much rain here in Arizona. I'm hopeful, but I'm sure there will be lots of caveats for the eyes-off, hands-off level three driving. All right, that is all of the questions. Next we're going to hear Mary Barra's closing remarks and that will end the show.
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Operator35:45
Thank you. I'd now like to turn the call over to Mary Barra for her closing comments.
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Mary Barra35:51
Thank you, and thanks to everybody for your questions. I hope you see that we're clearly operating in a very dynamic environment, but that's not unusual for the industry. 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 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 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 remain focused on delivering 8 to 10% North American margins this year. Our OnStar digital business, which includes Super Cruise, is contributing to high-margin revenue growth — and I'll remind everyone that is not cyclical. We're advancing automated driving technology in a way that separates GM from other companies. Finally, we're addressing the near-term cost impacts of higher costs, and we're prepared to respond quickly and strategically as the market continues to develop. Once again, thank you for joining us and I hope everyone has a good day.
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Operator37:27
That concludes the conference call for today. Thank you for joining.