In this episode, we sit down with David Welch, he's Detroit Bureau Chief at Bloomberg LP and Author of "Charging Ahead." His book about General Motors' CEO, Mary Barra, and the transformation of the 120 year-old company. We discuss the current state of the domestic automotive industry and the challenges presented by electrification, EV charging, GM's challenges with electrification and more!
Tune in to learn about the latest advancements in EV technology and find out what you can expect from the EV market in the next few years. From EV charging infrastructure to renewable energy sources, this episode covers it all!
Summary
The conversation covers various topics related to electric vehicles and the challenges faced by automakers, particularly General Motors (GM). The discussion highlights gaps in electric vehicle coverage and the need for better consumer education. It also explores the challenges of transitioning to electric vehicles and the skepticism within the industry. The conversation delves into GM's restructuring efforts and the difficulties in executing their electric vehicle plans. The book 'Charging Ahead' by David Welch, which focuses on GM's transformation into an electric vehicle maker, is also discussed. The conversation with David Welch covers the challenges faced by General Motors (GM) in the growth of electric vehicles (EVs) and the development of autonomous vehicles (AVs). Welch discusses the struggles with EV growth and the unexpected leveling off of EV sales along with why to still be optimistic. Plus what automakers can do to help move EVs. He also highlights the difficulties GM has faced in producing battery packs and writing software for autonomous vehicles. The conversation delves into the future of Mary Barra's leadership and the potential for changes in GM's leadership. Welch also addresses the challenges with the United Auto Workers (UAW) and dealerships in promoting and selling EVs.
Takeaways
- Need for better consumer education and coverage of electric vehicles to dispel misconceptions and highlight the benefits and ease of ownership.
- Traditional automakers (especially GM) are finding out that their experience ICE vehicles has not led to as smooth of ramp up in EVs as they had predicted.
- The growth of electric vehicle sales has slowed down, but it is not in retreat.
- EV startups face financial challenges and competition from established automakers and Chinese competition.
- The struggles with EV growth and the production of battery packs and software have impacted GM's plans.
- GM's future with autonomy is being tested and Wall Street seems would be very happy if it just went away.
- Mary Barra's leadership and the future of GM are still uncertain, but her decisions have made it unlikely that the board will get rid of her anytime soon.
- The UAW and dealerships pose immediate and long term challenges for selling EVs
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Want to be a guest on Grid Connections?
00:00:05
Good morning Grid Connections listeners.
00:00:07
And for those of you who may be listening
for the first time, the Grid Connections
00:00:11
podcast is the show where we unravel the
complexities of electric transportation,
00:00:15
renewable energy, and our electrical power
grid that ties all of this together.
00:00:20
I'm your host Chase.
00:00:20
And today we're joined by David Welch, a
Bloomberg Bureau Chief based in Detroit.
00:00:26
David shares his knowledge of the
automotive market and perceptions of the
00:00:29
market being based in the Motor City.
00:00:32
Especially around electric vehicles, a
topic he's extensively covered and is
00:00:36
passionate about.
00:00:37
Our conversation with David takes us on a
journey through the automotive industry's
00:00:41
transformative shift towards
electrification and autonomy.
00:00:44
We delve into the heart of General Motors
guided by David's book, Charging Ahead,
00:00:50
which is waiting for you in the show
notes.
00:00:52
Should you want to learn more and get a
copy yourself.
00:00:55
Make sure to check it out.
00:00:56
The book highlights CEO Mary Barra's
leadership in steering the 120 year old
00:01:01
company into a new era.
00:01:03
This episode on packs the challenges GM
faces from industry, along with even
00:01:07
serious corporate change to dealings with
the UAW and how they're navigating the
00:01:12
roadmap they've set out for
electrification.
00:01:15
But before we dive in a little
housekeeping, if you find today's
00:01:18
discussion enlightening, please share this
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00:01:22
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00:01:45
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00:01:47
Now buckle up as we explore the
electrifying road ahead with David Welch.
00:01:51
Tune in to discover the innovations,
challenges, and milestones defining the
00:01:55
automotive industry's race towards a
greener, more autonomous future.
00:01:58
With that,
00:02:00
I'm joined today by David Welch.
00:02:02
He's the Bureau Chief of Detroit for
Bloomberg.
00:02:04
Thanks for joining us today, David.
00:02:06
I think we're going to be covering a lot
of really interesting subjects.
00:02:08
And I know you've recently come out with a
book kind of talking about GM and some of
00:02:12
the challenges
00:02:13
but real briefly for anyone that might not
be familiar with you can you share a
00:02:17
little bit of your background and what
you've been kind of doing in the space
00:02:21
around automotive and how you got into it.
00:02:24
Yeah, so covering the auto beat on and off
for more years than I care to recount, but
00:02:31
20 something years for Bloomberg and
before that Business Week, which was
00:02:35
acquired by Bloomberg, it was the Detroit
Bureau Chief there too, actually started
00:02:40
covering the auto beat in Texas, covering
the plants down there.
00:02:45
And this was late 90s.
00:02:46
So he had like AutoNation and CarMax that
used CarMega stories before they all
00:02:51
morphed into something else.
00:02:54
So I covered the retail side of it as well
and taking some breaks, going to New York,
00:02:59
covered Wall Street for a bit.
00:03:00
And, you know, back in Detroit as Bureau
Chief covering the auto industry.
00:03:04
And yeah, the book Charging Ahead about
Mary Barra's effort to try to transform GM
00:03:09
into an electric vehicle maker.
00:03:11
And, it was tough.
00:03:13
It was tough sledding when I wrote the
book.
00:03:15
book a year ago and it's even tougher now
and some of it was sort of pre-saged and
00:03:19
we can get into that whenever you want to
talk about it.
00:03:21
But that's what the book's about.
00:03:23
It's not saying GM's the EV hero, it's
sort of Mary Barra as this character
00:03:28
trying to fix the company, change the
company.
00:03:31
And it's really tough to do that with an
automaker that's 100 years old.
00:03:37
No doubt.
00:03:38
I think that's a topic we've discussed
quite a bit here.
00:03:40
And I know a few episodes back we had John
McElroy on, and that was definitely a
00:03:45
subject that we touched on was the
challenges that GM and others kind of the
00:03:49
big three have definitely dealt with that,
with that disruption in the industry.
00:03:53
I think let's start off as someone who has
been in journalism, specifically on the
00:03:59
focus with automotive for so long.
00:04:01
I think there's a lot of people who listen
that who have been following and in the
00:04:05
electric vehicle space, especially,
00:04:07
have been kind of maybe disappointed, it's
not the right word, but it has been
00:04:12
interesting to see kind of gaps in
coverage of electric vehicles,
00:04:16
specifically around like the knowledge
base of them.
00:04:19
And recently we had kind of John Volcker
and we've had, as I mentioned also, John
00:04:23
McRoy on, and one of those topics we've
really discussed is obviously the
00:04:27
education at the dealership part.
00:04:29
But I do think another part is around the
actual journalism and coverage of the
00:04:33
automotive space right now.
00:04:35
What do you think are maybe some of the
gaps that you've seen, at least around the
00:04:39
knowledge base of electric vehicles, or
are there other areas that you think that
00:04:43
kind of need to be improved to kind of
help make it a lot easier for the average
00:04:47
person to understand and get into the
electric vehicle experience?
00:04:52
Yeah, I think in some ways there's this
idea out there that EVs are really tough
00:04:58
to own.
00:04:59
And it is different.
00:05:01
There are a lot of things EV owners need
to learn, particularly with charging.
00:05:05
The charging network isn't great, but I
think people dismiss the charging network
00:05:08
as practically non-existent.
00:05:10
The fact of the matter is, it does exist.
00:05:12
It's just, it's not on every street corner
like filling stations are.
00:05:15
You live with EVs differently.
00:05:17
And I've seen some really good stories
done on that.
00:05:19
It's just not the prevailing narrative for
electric vehicles that you can live with
00:05:23
them.
00:05:24
And you can live with them pretty easily.
00:05:27
It's just you're going to have to change
habits to do that.
00:05:31
And that's sort of a consumer journalism
bit that I think could be told better.
00:05:38
And the other part of it, and I've pushed
pretty hard internally at Bloomberg to
00:05:45
make sure our coverage reflects this, EV
sales aren't in retreat.
00:05:50
Sales growth is declining.
00:05:53
And that's an important distinction
because...
00:05:56
Before EVs came around, it was, well, the
auto industry sells 110 million, roughly,
00:06:01
vehicles a year globally.
00:06:03
And that's why they're not very good
stocks on Wall Street, because there's no
00:06:07
growth there, right?
00:06:08
It's not like AI or something that's new,
and there's going to be a bunch of revenue
00:06:12
growth unless you steal it from somebody
else.
00:06:14
And that's still true, but with EVs, EV
sales are growing rapidly globally.
00:06:20
And it has slowed down for a variety of
reasons that we'll talk about.
00:06:24
But...
00:06:25
It's not in retreat.
00:06:26
It's not like suddenly nobody wants them.
00:06:28
I think sometimes media coverage as a
whole can get bipolar on something.
00:06:33
You know, everything's great until we
decide it's not, and then we hate it.
00:06:36
Um, this is, you know, there's some nuance
here and the nuance is it's, you know,
00:06:43
it's still growing.
00:06:43
It's just, we're, we're hitting this flat
part of a classic technology S curve.
00:06:49
I think so.
00:06:50
And you do see that reported.
00:06:52
It's.
00:06:54
It's just, it sort of gotten this
narrative kind of took on a life of its
00:06:57
own that nobody wants an electric vehicle
anymore.
00:07:00
For sure.
00:07:01
And I think you're totally right.
00:07:03
I do.
00:07:04
Unfortunately see why it's probably taken
off more.
00:07:07
Just it is kind of chasing clicks and the
narrative sounds more interesting and gets
00:07:13
people to kind of tune into it.
00:07:15
But I agree with you there.
00:07:16
There's a challenge I think just with the
automotive industry in general, with
00:07:19
interest rates and many other things kind
of going on right now that makes just new
00:07:22
car sales in general harder.
00:07:24
Are there any trends in particular that
you think are the biggest headwinds or
00:07:28
things that you don't think are getting
enough coverage around that?
00:07:31
It's something that I've said this on
Bloomberg TV a couple of times, actually
00:07:36
several times, and that's not shameless
self-promotion, but I think when people
00:07:41
talk about EVs and whether or not
consumers want them, and by consumers we
00:07:45
generally at this point in history mean
people who aren't luxury buyers, who
00:07:50
aren't early adopters for technology.
00:07:52
Do they want them or not?
00:07:55
EVs get a lot of consideration.
00:07:56
I think they've captured the imagination
of a lot of people.
00:08:00
The challenge now, and this is the
subtlety I don't think always gets picked
00:08:03
up, is first of all people are happy with
their gasoline powered cars.
00:08:08
It's not like they're walking around
kicking empty cans and grousing about
00:08:15
those vehicles.
00:08:17
So it's the industry's job to dislodge
them from that.
00:08:22
But how do you do that?
00:08:24
Well, if you really think about it,
there's not a lot of variety out there.
00:08:27
compared to gasoline vehicles.
00:08:29
In the US market, there's one vehicle, now
that the Chevy Bolt has discontinued
00:08:34
temporarily, that's less than $40.
00:08:37
That's a Nissan Leaf.
00:08:39
And a Nissan Leaf is a compact hatchback.
00:08:42
Americans hate compact hatchbacks.
00:08:45
They've never bought them in big numbers.
00:08:47
And it gets about, I think, 210 miles of
range might be the max on it.
00:08:51
So, you know, that's not a great
proposition.
00:08:56
for people, for most American consumers,
but it's the only vehicle under 40
00:09:01
right now.
00:09:01
Now that's not counting tax credits.
00:09:04
I think you can get a Model 3 now, certain
configurations with the tax credits under
00:09:09
that, but they're still pretty expensive
is the point.
00:09:11
And there isn't nearly the variety that
you have with gasoline-powered vehicles
00:09:17
where you can get anything from a compact
on up to a Hummer.
00:09:21
You can get a Hummer electric actually,
but.
00:09:23
Right, right.
00:09:25
There's just more variety, more variety,
under $40.
00:09:29
So, I remember having, here's my analogy,
conversations back in the early 2000s when
00:09:37
Nissan and Toyota came out with full-size
pickup trucks.
00:09:41
I was writing for Business Week.
00:09:43
My editor said, well, here it is.
00:09:44
This is the end of Detroit because now the
Japanese are taking their last stronghold.
00:09:49
And they said, they took...
00:09:52
the sedan and compact market away from the
big three, why wouldn't they also take
00:09:56
pickups?
00:09:56
And I said, you know, because of a variety
of reasons, the quality of those family
00:10:03
sedans and compacts made by the Detroit
companies were truly terrible.
00:10:07
And those consumers were really angry and
they were happy to leave.
00:10:10
They actually left with two middle fingers
in the air for the most part.
00:10:14
But the people who bought pickup trucks,
those trucks were made pretty well and
00:10:20
those people loved them.
00:10:22
It's not going to be that easy for the
Japanese to just steal those buyers.
00:10:25
So what does that mean for the EV market?
00:10:28
You have pretty happy buyers.
00:10:30
I think when people drive EVs, they
realize they're faster, smoother, quieter,
00:10:33
and there's a lot about them that's really
cool.
00:10:35
But that's the industry's job is to tell
them why they should leave their regular
00:10:41
cars right now.
00:10:42
And, but they are happy with them.
00:10:44
So for the same reason, you know, that...
00:10:48
then Dodge, now Ram, Chevy, and Ford
didn't lose the pickup market.
00:10:52
The gasoline-powered vehicle market's not
going to just surrender itself so easily.
00:10:56
Consumers, they like what they like.
00:10:59
I think a lot of people will come around.
00:11:01
It's going to take longer than the
industry thought.
00:11:04
And I'm kind of curious since you are
based in Detroit, are there, what do you
00:11:09
think is kind of the perspective and what
you hear being kind of in the hub of
00:11:13
Detroit versus maybe the more common
narrative or maybe misperceptions people
00:11:17
have about how electric vehicles are doing
or that transition to them across the
00:11:22
country.
00:11:24
Yeah, you're hearing more skepticism from
inside the companies.
00:11:27
And honestly, that was kind of always
there.
00:11:29
There were a lot of engineers and people
working in the companies who would see
00:11:34
these big plans from Ford and GM, big
investments and wonder, okay, is this
00:11:40
really that smart, is that market going to
be there?
00:11:43
And.
00:11:45
You're hearing more of it now because
you've seen investment reigned in, you've
00:11:48
seen vehicle plans delayed, and you've
seen sales, not just from these companies,
00:11:52
but from others disappointed.
00:11:54
You see Tesla discounting massively over
the past year.
00:11:57
So, you know, there is, there was already
some skepticism.
00:12:03
Because people don't necessarily love
change, especially within their companies.
00:12:09
Right.
00:12:09
And so you,
00:12:12
You have Mary Bar or Jim Farley coming in
saying, we're going to invest all this
00:12:16
money.
00:12:16
And in Ford's case, we're going to split
the company in two.
00:12:19
And the people in the new co are the cool
kids and the people in the old co are in
00:12:23
this, you know, maybe a dinosaur of a
company.
00:12:27
And it turns out that, you know, the
dinosaur is going to live longer and new
00:12:31
co doesn't, you know, is getting defunded
in some ways.
00:12:35
And so there's probably an, I told you so
too, happening from people.
00:12:39
It's, you know,
00:12:42
So I think what's happening in the EV
market, the slowdown, and also the
00:12:45
slowdown in investment, which by the way
drives a lot of the narrative we were
00:12:48
talking about earlier, that has some
skeptics saying, I told you so.
00:12:54
You know, it's kind of funny you mentioned
the Ford blue and Ford, uh, model E
00:12:58
program because that got so much attention
when it was first kind of announced and
00:13:03
obviously when the market and kind of the
Evie, uh, momentum was much higher.
00:13:09
And now it seems like we don't really hear
too much about the delineation of those
00:13:14
programs unless it's maybe some sort of
like quarterly report or kind of a smaller
00:13:19
news story related to it.
00:13:21
Do you think that
00:13:23
Or I guess one, I'd be curious if you've
been hearing any more of, uh, from kind of
00:13:27
the inside of people that have seen that
firsthand and how that actual, uh,
00:13:31
execution of that business model has gone.
00:13:34
And do you think it's more kind of taken a
backseat just for the financials or do you
00:13:40
have any sense of how that, how successful
that program has been to kind of delineate
00:13:44
into two countries, uh, two companies at
Ford.
00:13:47
Um, I'm not sure.
00:13:49
I, you know, I was, when they did it,
there was a lot of pressure on GM to do
00:13:54
the same thing and GM had said basically
that they had kind of already done it.
00:13:59
It just, it wasn't as aggressive.
00:14:02
They, they, because it's still reported to
the same top executives.
00:14:07
Um,
00:14:07
And actually, you mentioned John McElroy
earlier, John and I had this debate at one
00:14:11
point.
00:14:11
Like John thinks that any company, or at
the time he did, I don't know what he
00:14:14
thinks now because a lot of these things
are going in reverse.
00:14:18
He said, any company that has, doesn't
have its own separate EV company run by
00:14:21
somebody from Silicon Valley, like they're
going to die.
00:14:23
And I said, wait a second, you're talking
about word charts here.
00:14:27
You know, like at the end of the day, Jim
Farley runs Ford.
00:14:32
And he makes the decisions for the Blue
Oval side of the company and the EV side
00:14:37
of the company.
00:14:38
And that's that.
00:14:39
And there are people working on just EVs
at General Motors and Stellantis.
00:14:47
At the end of the day, they report to the
same CEO.
00:14:50
And I can guarantee you when...
00:14:54
Ford decided to reduce investment by 12
billion.
00:14:57
That wasn't decided by one person on the
EV side of the company.
00:15:00
It was Farley, it was the board of
directors, just the same way it would be
00:15:03
if they never split the company like that.
00:15:06
And when Mary Bar decided to delay the
Orient Township pickup truck plant, that
00:15:12
wasn't decided by...
00:15:14
the executive who runs the EV truck group
that builds vehicles in Hamtramck that was
00:15:20
decided by her leadership team and the
board.
00:15:25
Does it help them getting people to
develop technologies?
00:15:31
Short answer is I don't know.
00:15:32
I've always wondered about it because
there's a lot about both vehicles you
00:15:37
still need like basic guts of the car, the
interior, the design, the chassis, all
00:15:42
that kind of stuff.
00:15:44
where you're having the same people
engineered, you still have to work with
00:15:46
them.
00:15:47
So you know, one of the things
historically that got General Motors into
00:15:55
trouble was they used to have all these,
all the vehicle divisions had their own
00:15:59
engineering groups.
00:16:00
This goes back many decades.
00:16:03
And for efficiency's sake, they put it all
together.
00:16:06
And a long retired GM executive told me
that actually caused a lot of problems
00:16:11
internally because, you know, it used to
be, you know, you're, you're a power train
00:16:17
engineer and the transmission guy for
Buick sat next to you or worked on your
00:16:22
floor.
00:16:23
And if there was an issue, you'd go over
there and talk to him.
00:16:26
And then once they reorganized everything,
you know, the, the expertise went hither
00:16:30
and yon and it really caused a lot of
problems.
00:16:33
I'm not saying that's that happened at
Ford, but.
00:16:35
Right.
00:16:37
know, it's just, you know, these things
can work or they can not work.
00:16:40
And, you know, I never saw that as a
deciding factor.
00:16:44
I mean, the bottom line is like these
companies have to figure out how to make
00:16:47
batteries and the software that makes all
this stuff work and get the vehicles
00:16:53
produced.
00:16:55
Well, and that is what's kind of
interesting.
00:16:56
I mean, in that example, especially, I
mean, that has been one, one of the things
00:17:00
that the startups and even some of the
Chinese companies, when asked about how
00:17:04
they run their business or what has kind
of led to the flatness of their
00:17:09
organization and their speed is actually
kind of that old model where they will
00:17:12
have the engineers and the designers and
all of them close to where the cars are
00:17:17
actually being manufactured.
00:17:19
So it's, it is kind of interesting to see
that is that traditionally was.
00:17:24
And it seems to still be a very cost
effective and, uh, time efficient way to
00:17:29
move vehicles forward.
00:17:30
And I, I'm kind of curious with, has there
been talk of trying to move back to that
00:17:37
style of manufacturing more with some of
these companies?
00:17:40
I know there have been talk.
00:17:41
They were going to do that with, uh,
speaking of the Ford, uh, model E and blue
00:17:46
programs.
00:17:46
But I'm, I'm just kind of curious if that
actually ever materialized or you've seen
00:17:50
that even with GM or it's more just from a
00:17:52
in house basically.
00:17:54
Uh, bring more stuff in house and just
also bringing, um, I mean, I can think of
00:17:59
a couple of examples for Ford that they've
kind of looked at, like, I mean, the Ford
00:18:02
GT and some of these where they, they take
a very small, dedicated, uh, group of
00:18:06
people and just throw them at the problem
and let them handle it versus kind of some
00:18:10
of the larger teams that we've
traditionally seen from like the big three
00:18:14
for the last couple of decades, are you
seeing any or hearing much about that
00:18:18
across?
00:18:19
being in Detroit from like the traditional
automakers about going more to these
00:18:23
smaller kind of focus teams and almost
more like a software style of product
00:18:29
management.
00:18:30
You know, they definitely did with, like,
take the Electric Hummer.
00:18:33
Um, they, they did that program in, I
remember writing about this.
00:18:37
It was like, you know, typically these
programs were like four years and they did
00:18:41
it in like 23 or 27 months, something like
that.
00:18:44
It actually might have been 27.
00:18:45
It was a little more than two years.
00:18:46
And they had a very small team and they
used to meet, you know, all together in,
00:18:50
in like one.
00:18:52
one building in GM instead of like, you
know, different departments all over the
00:18:55
company.
00:18:57
And the guy ran it was guy named Josh
Tavill, who's sort of co-head of product
00:19:01
development at GM now.
00:19:03
And he, I did a story on this.
00:19:03
He, he borrowed from Amazon though, like
the, I think it was the one, it was the,
00:19:08
the pizza rule where if you had a meeting,
you know, you should never have more
00:19:12
people, like one pizza should feed
everybody in the meeting.
00:19:15
Otherwise you've got a bunch of people who
probably don't need to be there.
00:19:18
And then he had time limits on meetings.
00:19:20
Like this is how long we're going to spend
meeting to like get decisions made.
00:19:24
But it was a very small group and that's
how they got that vehicle done quickly.
00:19:28
Now they've had problems with it.
00:19:29
I don't know if it's related.
00:19:30
I don't think it's related to the size of
the management teams.
00:19:32
I think it's just switching from making
vehicles with engines and transmissions to
00:19:38
EVs pretty hard.
00:19:39
The whole industry is having a tough time
with this.
00:19:41
Well, and that is something I do kind of
want to talk to you about because for the
00:19:44
longest time, I felt like the traditional
big three is like, oh, Tesla is doing
00:19:48
their little thing.
00:19:48
These startups are doing their little
thing.
00:19:50
When we want to make electric vehicles,
we're going to be able to make electric
00:19:53
vehicles, we made cars for decades.
00:19:55
And a lot of people were saying that.
00:19:58
Probably, but it is a different beast
altogether.
00:20:02
And now we are kind of seeing whether
that's through, uh, I think for more, for
00:20:06
forward, they've actually been pretty
effective, but it's been the cost
00:20:09
challenges.
00:20:10
Trying to get those and supply chain But
then you look at GM and it does seem to be
00:20:15
that there have been some pretty big
issues just across the spectrum of
00:20:20
Electric vehicle development and actually
the manufacturing What do you think?
00:20:26
I?
00:20:26
Mean, I think this could be its own
podcast episode alone.
00:20:29
But what do you think have been kind of
the big takeaways from this?
00:20:33
Experience or I don't know if hubris is
the right word but kind of the experience
00:20:38
that
00:20:39
Maybe making electric vehicles wasn't as
easy as they thought it would be and how
00:20:43
that might be affecting their
decision-making
00:20:46
I think it's true across the board.
00:20:48
So, you know, take GM, they've had this
issue assembling battery packs, right?
00:20:52
The Ultium pack, the Ultium pack, by the
way, it was never like that.
00:20:55
There's no secret sauce in terms of
battery chemistry or form factor or
00:20:58
anything like that.
00:20:59
What Ultium is, is it's an industrial
strategy.
00:21:02
It's, you know, you're taking your cells
and you're putting X number of them into a
00:21:07
box that's a module and X number of
modules into a pack.
00:21:10
and the number of modules that go into
that pack, that's your Lego set.
00:21:13
So you can make everything from a Chevy
Bolt on up to a Hummer, right?
00:21:18
Or a Cadillac Escalade.
00:21:19
And it's basically the same basis of the
vehicle, the same platform.
00:21:24
And, so it's almost a manufacturing
strategy.
00:21:32
And that's the part where they've fallen
down, right?
00:21:34
Like the Ultium cells plant is doing fine.
00:21:36
It's getting those, the battery packs
made.
00:21:39
And then they've shown some progress
there, but then they've had all these
00:21:43
software issues that have grounded the
Chevy Blazer EV.
00:21:48
They're not alone, right?
00:21:49
Like Toyota had wheels falling off of the
BZ4X.
00:21:51
And that's saying something like
Volkswagen's or Volkswagen.
00:21:55
Toyota is one of the best, if not the best
manufacturer in the industry.
00:22:00
And they're having those issues.
00:22:02
The Germans Volkswagen and I think
Porsche.
00:22:06
They both had issues with software, kind
of like GM is.
00:22:09
I think maybe different software problems,
but software problems nonetheless.
00:22:14
So.
00:22:14
Well, and I think it's kind of interesting
to mention that now, uh, with kind of the
00:22:18
ability of hindsight, it almost seems like
the Germans knew, especially the VW group,
00:22:22
they knew they had problems.
00:22:23
So they just delayed all their vehicles.
00:22:26
Whereas it seems like GM continue to just
move forward with these.
00:22:28
And now that they're out or supposed to be
out, they're really realizing how many of
00:22:32
these software issues they have.
00:22:34
But I, I'm sorry, what were you going to
say there?
00:22:36
Well, you know, they're I think in the
case of GM and maybe a lot of these
00:22:42
companies and Ford too, right?
00:22:44
Like they just recently stopped F-150
production because of quality issues.
00:22:48
They all they were so far behind Tesla and
they were in the Chinese for that matter.
00:22:52
And they were in such a rush to catch up.
00:22:54
And they had to be that they probably will
definitely get off more than they can
00:23:00
chew.
00:23:03
And they might deny that, but they've all
had production quality, software issues,
00:23:07
you name it, and have had to stop
production, ground vehicles for some
00:23:13
period of time because of this.
00:23:16
So yeah, I think the software side of it
was probably underestimated.
00:23:20
They might not have had the right talent
in place to do it.
00:23:23
And same with battery, you know, the US...
00:23:27
battery infrastructure, battery industry.
00:23:29
It's like there really isn't much of one,
right?
00:23:31
We're relying on Korean and Chinese
partners for the technology and the
00:23:34
know-how.
00:23:35
We gave it all away and now we're rapidly
trying to catch up.
00:23:38
And there's a lot of software that goes
into that too, the battery management
00:23:41
system.
00:23:43
And, you know, do we have the expertise
there?
00:23:46
I don't think we do, I think we can get
it.
00:23:47
I mean Silicon Valley is extremely
adaptable and a lot of people great at
00:23:51
writing code and I think that'll come but
Tesla has it, right?
00:23:57
So we can, as a nation, our companies can
get there but it's really competitive to
00:24:03
get the talent and everyone's in a hurry.
00:24:06
In a weird way, the fact that adoption and
EV sales, the growth has slowed down a
00:24:12
bit.
00:24:14
It kind of gives some of the established
old line car companies maybe a bit of a
00:24:19
time out to figure out the industrial and
the software and the technology side of
00:24:24
this before the market really takes off.
00:24:26
Because look, if the growth rates kept
going at the way they were going, these
00:24:31
guys would be in serious trouble because
they wouldn't have the vehicles and they
00:24:34
wouldn't have the production to meet it.
00:24:36
So
00:24:36
sure.
00:24:37
In a way, they should be thankful that
this is slow down, even though it's making
00:24:40
their lives difficult because you know, if
you're You're Mary Bar and Jim Farley and
00:24:46
you've delayed factory plans or you've
reigned in investment for EVs You know now
00:24:51
your decision is do you have to do that
more based on what the market does or if
00:24:55
not Like when do you know hit the
accelerator again?
00:24:58
These are all tough decisions for them.
00:25:00
Now they make more money than you and I do
so I have no sympathy for them They have
00:25:03
to make them.
00:25:04
That's the job, right?
00:25:07
But, you know, that's, it's all going to
be pretty tough on them, but they do have
00:25:12
this, maybe a bit of a market reprieve to
figure it out.
00:25:16
Well, and that's interesting you bring
that up because that's something I've
00:25:18
talked to with a few people about and my
take on it, and I'd be curious if anyone's
00:25:23
kind of shared this is what we're seeing
is yes, the, some of the, I think the
00:25:28
demand for new cars in general is often,
but a lot of it is that focus on electric
00:25:31
vehicles and the domestic three, two and a
half, whatever you want to call them are
00:25:37
looking at moving kind of back to hybrids,
plug in hybrids.
00:25:41
So you're, there is a
00:25:43
But my question, what I'm kind of curious
and would like to hear your thoughts on is
00:25:47
do you think it's a reprieve in the short
term?
00:25:51
Because by going back to what they're kind
of comfortable with and know more about,
00:25:55
to me it just seems like it gives Tesla
and some of the other startups, but
00:25:59
especially the Chinese the ability to kind
of just keep leaning into what they're
00:26:03
doing.
00:26:03
So once that moment or that interest
catches up or we kind of see some kind of
00:26:09
growth return,
00:26:11
they're going to be actually, I think in
an even better position, supply chain
00:26:14
wise, technology wise, scale wise, uh, to
be ready to kind of just kind of turn up
00:26:20
the factories versus being, if you're
making just plug in hybrids and now you're
00:26:25
seeing more of a demand to go to full
electrics or other things that you have to
00:26:29
change a lot more, at least that's my
opinion.
00:26:31
And I'm kind of curious if you've heard
any other kind of people talking about
00:26:35
that locally.
00:26:36
Um, well, it's, so it's not like it's not
either or like, it's not like, with the
00:26:42
exception of Toyota, right?
00:26:43
They're only making a couple of these, but
they do have more coming and they're heavy
00:26:47
on plug-in hybrids.
00:26:48
I'll tell you, like, here's what I know,
at least with the US companies and to a
00:26:53
degree with the European companies.
00:26:55
They really don't want to do plug-in
hybrids in big numbers.
00:26:59
I think they want to do just enough in
some key segments to meet the demand
00:27:03
that's there and to meet...
00:27:05
fuel economy and greenhouse gas
regulations that are going to get tougher.
00:27:09
Because Toyota is great at making those.
00:27:12
The Koreans are pretty good too.
00:27:14
But they are expensive vehicles to make
because you still do have this electric
00:27:18
system on board and you still do have
gasoline and exhaust and all of this stuff
00:27:22
on board.
00:27:23
So it's not a great and long-term business
model.
00:27:28
They're doing it because they feel they
have to.
00:27:31
And so I think...
00:27:35
They're all still going to lean into the
development of their EVs.
00:27:41
Just a little less so, but the less isn't
like emphasis on developing their supply
00:27:47
chains and developing the software talent
they need and the battery operations.
00:27:53
The less is just like how much of it
they're doing all at once.
00:27:57
Now, the distance, so they're still going
to be working on developing all of this
00:28:01
stuff.
00:28:02
They will be, I think they're going to be
developing less volume because they're
00:28:07
selling less volume, right?
00:28:09
None of them do well in China where the
real EV volume is, so they're not going to
00:28:12
get it there.
00:28:13
And Ford does okay in Europe, GM is barely
there, so they're not going to get it
00:28:20
there.
00:28:21
So they're going to have to rely on
volumes in the US market to get it.
00:28:26
You know, GM in China is going to be
interesting because they're struggling
00:28:29
over there.
00:28:30
Yeah.
00:28:31
they do have this partnership with Wuling
and Shanghai Automotive.
00:28:35
SAIC was their long-term partners, but
they make small, really cheap EVs.
00:28:40
The Honglong Mini has been a really big
success for GM.
00:28:44
But that's where GM can get some knowledge
on how to make cheap EVs.
00:28:51
in that market without having to like sell
them under the Buick brand or, or develop
00:28:56
their own operations.
00:28:58
So that, that helps them there.
00:29:00
But, you know, so can they replicate some
of the learnings over there?
00:29:03
Like, I think the biggest risk here is,
and this is what the IRA, you know,
00:29:08
Biden's Inflation Reduction Act is all
about is telling everybody, look, you can
00:29:12
get all these great incentives to build
and for your customers to buy EVs, but you
00:29:17
have to do it here.
00:29:18
And it's because like,
00:29:20
The US industry sort of writ large needs
to develop an EV industry.
00:29:26
And Tesla has, but nobody else has.
00:29:30
And so that's to your point.
00:29:34
I think that that's where they can fall
behind specifically the Chinese because
00:29:38
the volume there is going to keep growing.
00:29:40
And here it's going to fit and starts.
00:29:44
And scale is one of the things in the auto
industry and scale is so important.
00:29:49
Well, this, uh, this can also goes back to
the conversation with John McRoy, where he
00:29:52
was saying, I mean, the only reason Tesla
got successful was it hit like 80 of
00:29:56
the model three, and then it kind of takes
off.
00:29:58
If you don't have those numbers, then
you're just burning money for a long, long
00:30:02
time.
00:30:03
And I think.
00:30:05
Yeah.
00:30:06
Right.
00:30:07
you know, they're making, I mean, Rivian's
making 50, 60 a year last year and
00:30:13
forecast for this year.
00:30:15
Um, and they lose a lot of money and they
burn a lot of cash and Lucid does even
00:30:20
fewer vehicles.
00:30:21
But you know, those business models don't
work.
00:30:24
Uh, those companies, I, you know, they're
probably going to have to raise money and
00:30:29
find investors who are willing to kind of.
00:30:31
towering losses for a long time until they
can get real volume.
00:30:34
Chinese are well past all of that stuff.
00:30:36
Tesla's well past all of that stuff.
00:30:38
Ford and GM still aren't close to that and
they're a lot closer than those startups.
00:30:42
So we kind of have three auto industries
right now.
00:30:44
We've got Tesla, BYD, and these Chinese
companies that have a lot of volume.
00:30:49
Then you've got Ford, GM, and the Germans
and the Japanese who don't have a lot of
00:30:55
volume and stuff to go up that curve.
00:30:57
Then you have these startups that are even
further behind.
00:31:02
and probably will be for a while because
they don't have the distribution and the
00:31:05
sales numbers to get there.
00:31:07
Well, and they have a much worse market
and also much more competition than Tesla
00:31:12
did during its growth phase.
00:31:13
So even same with the Chinese, at least in
their market too.
00:31:17
So it is kind of interesting.
00:31:20
I'm a big fan of the Rivians.
00:31:21
I think they're great looking vehicles.
00:31:22
They're spendy.
00:31:24
But yeah, but I even just saw a chart just
a couple of days ago that kind of blew my
00:31:29
mind that Rivian.
00:31:31
is actually in a worse financial position
than Tesla was kind of going through like
00:31:34
the scale of model three and all this
stuff.
00:31:36
So it was, I'm sure there'll be, I think
of the startups, they're probably in the
00:31:40
best position.
00:31:41
Um, having the Amazon backing of that
money behind it is something if you need
00:31:45
to get more funds, isn't bad, but yeah,
it's, I mean, it's, it is a, uh,
00:31:49
incredibly difficult time, I think for
everyone right now, uh, outside.
00:31:54
up in an era when raising cash was easy,
right?
00:31:58
Easy Wall Street money, their interest
rates were super low.
00:32:01
He could borrow money for next to nothing.
00:32:03
And Elon Musk is just, you know, a lot of
people hate him, but got to give the guy
00:32:08
his due.
00:32:09
He's, you know, great technologist.
00:32:11
He's, and he's great at raising money.
00:32:14
And, and he did it at a time when it was
pretty easy.
00:32:17
Rivian and Lucid don't have that luxury
right now.
00:32:20
Um, and.
00:32:22
And the, and the Chinese kind of did too,
just by being in China, having the
00:32:25
government backing back then for what they
were doing.
00:32:27
So I, I completely agree with you in that
standpoint.
00:32:30
I don't think that's something that gets
enough, um, kind of perspective is like,
00:32:34
even when you overlay the graphs of these
startups and how they're doing compared to
00:32:38
Tesla during its similar phase, it's just
a much different sales market, much
00:32:43
different supply chain, much different
everything.
00:32:46
Um, but let's, uh, we're in agreement on
pretty much all that.
00:32:50
It sounds like so.
00:32:52
Let's kind of finally jump over to your
book and really kind of go through what
00:32:56
you're you've seen and discovered through
GM and the whole process it's gone for.
00:33:02
So I, I haven't been able to finish the
book yet.
00:33:04
I started reading it.
00:33:05
I really enjoyed it.
00:33:06
So it's really interesting, but I would
love to hear kind of, um, for those
00:33:10
listening, what the book is about, what
got you started on it, and then we can
00:33:14
kind of go through some of the topics and
the things you learned.
00:33:17
Sure.
00:33:18
It started with a cover story in
Businessweek, trying to remember, I think
00:33:21
it was 2019 or 20.
00:33:23
This is basically looking at what Mary
Barra had done with, it must have been
00:33:27
2020 because it was after the 2019 strike.
00:33:31
And she had...
00:33:35
She had downsized this global footprint,
right?
00:33:38
Like she closed down Europe, closed down
their operations in Russia, India,
00:33:42
Southeast Asia, all these places GM lost
money.
00:33:45
And the idea was they were spending
billions of dollars on new products there
00:33:48
and losing money anyways.
00:33:50
And they just weren't well positioned in
the market and it would take years to fix
00:33:53
that.
00:33:53
So her huge decision, and this is one of
the biggest retrenchments in corporate
00:33:58
history, not just the US, but worldwide.
00:34:02
She closed down all that stuff and took
all that money.
00:34:06
and plow it into some of it into cruise
and getting into autonomy, but most of it
00:34:11
into developing the ultium battery and all
of these vehicles.
00:34:14
And by doing that, you know, there's an
old saying in baseball, you can't steal
00:34:19
second and keep your foot on first.
00:34:21
So she seeds all of those markets to
Toyota and Volkswagen and some others, but
00:34:25
primarily Toyota and Volkswagen.
00:34:27
Just says, look, you guys can have all of
those low margin sales in India.
00:34:31
And you can have.
00:34:35
you know, the mess that is Russia and you
can have the overheated market that is
00:34:39
Europe and whatever is left in South
Africa and Southeast Asia, fine.
00:34:44
We're going to sell vehicles in Brazil,
China, the US, and we're going to make a
00:34:47
lot of money doing it, and then we're
going to call that money into EVs and
00:34:50
become electric vehicle kings.
00:34:52
Now, and she also restructured the US
business to make it more profitable.
00:34:56
And so what that left us with is the GM of
today, which is a cash machine.
00:35:02
They generate a lot of money.
00:35:04
Um, but you know, on her way there, she
got in big fights with Donald Trump,
00:35:09
right?
00:35:09
There's a couple of chapters that there's
one chapter just about the war with Trump,
00:35:14
but he sort of, you know, she'd be, Mary
Barr became one of Trump's favorite
00:35:17
targets.
00:35:18
Um, you know, she leaned up operations in
the U S which meant a war with the UAW,
00:35:22
uh, which, you know, was really got hot in
2019, but reared its head again, uh, late
00:35:28
last year with another strike.
00:35:30
So, you know, you start bringing out
change and closing certain operations and,
00:35:35
you know, presidents who promise people in
Ohio that their jobs are coming back get
00:35:38
very angry.
00:35:39
And the union gets very angry.
00:35:42
So she had to fight all of them in order
to restructure this company.
00:35:47
And then internally, there was pushback.
00:35:48
You know, a lot of executives and
engineers were questioning.
00:35:51
There's some, you know, inside meetings
with debates on that about how much they
00:35:56
should plow into electric vehicles and...
00:36:00
whether or not they should just do like
one or two token EVs to say we're here.
00:36:04
But her vision was to catch Tesla.
00:36:06
Her vision was to make sure that, you
know, Google via Waymo did not become the
00:36:11
next generation of automaker.
00:36:14
And, and she pushed really hard.
00:36:15
Now the book, I had to finish the book in,
geez, I think May of 21.
00:36:24
June, May, June of 21.
00:36:27
And, um.
00:36:29
I couldn't foresee all that's gone wrong
today.
00:36:31
However, I stand by everything in this
book because the last chapter of the
00:36:36
epilogue basically looks at what was going
on at the time I had to finish this book
00:36:41
was she fired Dan Ammon as head of crews
because things weren't working there.
00:36:44
The Chevy Bolt was on fire and they still
didn't have any of these out there to
00:36:49
challenge Tesla.
00:36:51
And, you know, on Wall Street parliaments,
its GM has execution risk, which is, you
00:36:56
know, that's very fancy banker language
for these guys who might not be able to
00:37:00
get this done.
00:37:02
And so with all these problems they were
having, I asked Mary in the last interview
00:37:07
right before I finished the book, I said,
do you ever feel like this company suffers
00:37:11
from some kind of generational curse?
00:37:13
Because I actually use those words in the
book too, in that last chapter, because
00:37:18
Here at GM is with the Volt, which was
actually a pretty successful product.
00:37:24
It had some oil buyers, sold in pretty
good numbers.
00:37:27
The technology was pretty good.
00:37:28
I mean, 280 miles of range on a small
vehicle that sold for that price, pretty
00:37:33
good.
00:37:35
But then it's on fire.
00:37:36
And she had a bit of a sense of humor
about it.
00:37:39
She said, no, we're not cursed.
00:37:41
And we're not explained that when you run
a big company, there are always issues.
00:37:44
But that did sort of...
00:37:46
You know, pre sage the fact that, you
know, this company has, does have often
00:37:51
have a lot of these problems.
00:37:52
They, they, they just kind of, you know,
they, they seem to open doors and have
00:37:58
doorways collapse on their head at times.
00:38:00
And, and that's kind of what's happened
with EVs.
00:38:04
You know, look, she had, she freed up
money from lousy operations to put it into
00:38:09
electric vehicles.
00:38:10
And she had this platform that was going
to give her something, you know,
00:38:14
categories that represented 70-75% of the
US market volume, right, all smart, and
00:38:21
get there before Tesla did, except that
they, you know, they haven't been able to
00:38:24
execute.
00:38:24
They haven't been able to get the cars out
the door for the reasons we were talking
00:38:27
about earlier.
00:38:29
And it's not, I don't think it's anything
particular to GM's ability or inability to
00:38:34
do it compared to the other legacy car
companies.
00:38:36
I think they push so hard with so many
vehicles all at once.
00:38:41
And I do think they underestimated how
tough it was going to be to make electric
00:38:45
vehicles.
00:38:46
Because they had done the EV1 before.
00:38:47
They did the Volt.
00:38:48
They did the Volt.
00:38:49
This should be pretty easy.
00:38:50
They've been making cars for 100 years.
00:38:52
Why is it so hard?
00:38:53
But it has been.
00:38:54
And I think part of it is they were doing
a lot all at once.
00:38:57
And part of it is the games changed,
right?
00:38:59
These are much more high tech EVs than
they did in the past.
00:39:03
And and by the way, like the Volt or
rather the Bolt, you know, that was kind
00:39:08
of heavily used.
00:39:09
see what you just did there.
00:39:10
I think even with the strip, uh, part of
the problems I had with their strategies,
00:39:14
the bolt, the volt people would always
like, there's even marketing.
00:39:18
I think that's what's been so surprising
to me is how you're talking about, like GM
00:39:21
had so many issues.
00:39:22
Like I feel like marketing, all these
things that traditionally has been
00:39:25
strengths for them, they even failed with
like, it has been kind of a cross support,
00:39:28
but I I'm sorry, what were we going to say
there?
00:39:34
Um, you know, with the, with the bolt, um,
you know, that, that vehicle was, and I
00:39:42
think one of the reasons that they, they
did all right with it in terms of quality
00:39:46
was it was basically a Chevy Cruz heavily
retrofitted to fit a battery and become a
00:39:52
Chevy Bull.
00:39:53
It wasn't an all-new platform and that
platform was the battery pack in the floor
00:39:58
the way it is with Ultium.
00:39:59
And you know go back about 15 plus years,
Nissan opened the plant in Mississippi and
00:40:08
they had an all-new minivan platform.
00:40:11
They had an all-new, they had the pickup
truck which was new to them and they had
00:40:14
an all-new platform for the Ultima.
00:40:16
Even though they've been making minivans
and Ultimas before, it's an all-new
00:40:18
platform.
00:40:19
They had tremendous quality and production
problems there.
00:40:22
And these are kinds of vehicles Nissan
have been making forever.
00:40:24
There's nothing special about them.
00:40:25
They were just new platforms, but they
built off a lot and all at once and had a
00:40:29
real, you know, and they choked on it.
00:40:31
And, and I think in GM's case, yeah, they
did the Volt and the Volt and they did the
00:40:36
EV1 years ago, but this, even this, this
new stuff is so different.
00:40:40
And, um, yeah, it, it was a, you know, it
was more than
00:40:45
Clearly more than they could do because
the past year has been a big problem.
00:40:48
You bring up marketing.
00:40:50
I'm not sure GM is a great marketing
company.
00:40:53
Like the GMC brand is, you know, has one
of the best brand names in the business.
00:40:59
Um, actually, I guess Chevy does, you
know, is very consistent too.
00:41:03
They've had a Cadillac's been a problem
for a long time.
00:41:06
I agree with you there too.
00:41:08
I think what I meant was specifically
around marketing their electric vehicles,
00:41:11
like doing the bolt vault and just kind of
some of this name-branding and then having
00:41:15
these huge Superbowl ads and stuff.
00:41:18
Um, obviously the big stuff of kind of
like having Biden coming in and say
00:41:23
they're leading the way.
00:41:25
And I think that totally all adds to what
you were talking about, about having all
00:41:29
this pressure on them to get out the door
and it just can almost push them to go
00:41:33
faster and
00:41:35
Unfortunately, probably at their own
detriment, but
00:41:39
Yeah, look, I think they saw it as an
existential fight.
00:41:42
And, uh, you know, and you think about it,
you know, four or five years ago,
00:41:48
everybody, analysts, investors, the think
tanks, the car companies, they all thought
00:41:55
that there was going to be a somewhat
linear, I don't think anyone thought EV
00:41:59
growth is going to be totally linear, but
I don't think they started leveling off
00:42:02
the way it is now.
00:42:03
Um, and they really, people thought
autonomy would be
00:42:07
because it's been, has it been about a
year since your book came out?
00:42:12
A little more by a year, a year and three,
four months.
00:42:15
gotcha, what would be the chapter that you
would have written to make it like
00:42:20
relevant to today or like what are the
things that maybe have surprised you or
00:42:24
kind of stand out moments that have led
since that book came out?
00:42:27
I mean, it sounds like a lot.
00:42:29
I mean, everything I've read still seems
relevant and it almost seems like the
00:42:32
stuff I've read so far has just kind of
come to fruition.
00:42:35
But I'm curious if there's anything else
you would add to it.
00:42:39
You know, yeah, definitely.
00:42:40
So look, if I could, if I could do another
chapter on this, then I would make the
00:42:47
epilogue just chapter, I think it's 12.
00:42:51
And then I would have a new epilogue that
gets into all these struggles that the
00:42:56
company has had just making battery packs
and writing the software and everything
00:43:00
with crews and that, by the way, the other
companies have had too, I think it's worse
00:43:05
at GM because GM pushed harder.
00:43:08
They sold this harder and they've had all
the problems ever.
00:43:11
So sometimes they had just software, some
of it production issues and GM's got them
00:43:14
all.
00:43:17
So there'd be a chapter just looking at
all these problems that have been way
00:43:21
worse than they thought.
00:43:22
And there's been some reputational damage
at GM about this for sure.
00:43:28
And from an investment standpoint, what
they've done, they've bought back shares
00:43:33
and they've
00:43:33
raise their dividend.
00:43:35
That's telling investors we're not a high
growth company with our EV plans right
00:43:38
now.
00:43:39
We're a value company that returns cash to
shareholders.
00:43:43
So they've sort of thrown in the towel on
being rapid growth until they get their
00:43:46
hands on this thing.
00:43:47
It doesn't mean they won't be at some
point, but that's where they are.
00:43:51
So yeah, I would have written a chapter on
that.
00:43:56
And if I could change anything about it,
the only thing that would probably really
00:44:00
change is there was some...
00:44:02
The title is still pretty cool, Charging
Ahead, because Mary Barra really did
00:44:05
charge ahead.
00:44:07
The cover language was maybe a little more
optimistic than I'd like it to be at this
00:44:15
point because they've had such a tough
time with the challenge.
00:44:18
I wanted the cover language to be more,
she's betting, making big bet on this
00:44:21
thing.
00:44:23
It's a fight that I lost.
00:44:26
Yeah.
00:44:27
Now that's interesting though.
00:44:28
But you decide in your core business,
you're going to give up all these overseas
00:44:31
markets and let Toyota, Volkswagen, and
other domestic players in those countries
00:44:36
have that sales volume and whatever
business you can do there.
00:44:41
And by the way, you know, Peugeot, which
is now Stellantis, has done pretty well
00:44:44
with Opel since GM sold it to them.
00:44:46
It can be done.
00:44:47
So, you know, it was a big gamble and so
far it hasn't paid off.
00:44:54
I still.
00:44:55
McElroy and I were talking about this on
his show.
00:44:58
We still think her vision is the right
one, but the last thing she has to fix is
00:45:04
can this company, does this company have
the chops to see it through?
00:45:07
That's the big question.
00:45:09
And I still don't have an answer to that.
00:45:11
Well, and one of the things you guys kind
of alluded to or kind of threw out there
00:45:14
that I think I watched this episode, the
one that was maybe a month ago or so, and
00:45:19
I'm kind of curious about...
00:45:23
how long she has to make those changes
before the pressure is like, we might need
00:45:30
someone else in charge.
00:45:31
Cause one of the interesting things I kind
of indirectly got a lot of attention
00:45:38
towards her in a negative way was the
whole Elon Musk pay package thing that I
00:45:42
was like, Oh, this got struck down.
00:45:44
He made $60 billion, but like, well, he
only made that money because of the
00:45:48
agreements that, and I think to some
extent there's pros and cons to it.
00:45:53
maybe unrealistic for someone who isn't a
founder, but the idea that, yeah, he got
00:45:57
paid out a bunch, but it made a bunch of
money for the shareholders.
00:46:00
And there's also other variables involved
in that.
00:46:03
But then it kind of brought in the, even
in the news cycle, some attention, like
00:46:07
they were looking at Mary Bar.
00:46:08
It's like, well, the stock prices
essentially, it went up, maybe doubled at
00:46:12
one point, but now it's back to where it
was after 10 years.
00:46:14
They've paid her $200 million.
00:46:16
And when you include inflation, it's less
than what it was worth when she started.
00:46:23
And obviously that is an uphill battle for
anyone to fight.
00:46:26
I think being the CEO of GM might be a
more difficult and less like job than
00:46:34
being president even right now.
00:46:36
But I'm kind of curious on what your
thoughts are on like that forward looking
00:46:42
and how much time she really has to make a
change to kind of guarantee she stays in
00:46:47
her role much longer.
00:46:49
Yeah, she's 62 now, right?
00:46:51
So she could retire in three years.
00:46:53
Um, and.
00:46:57
You know, I think the only way the board
would throw her out.
00:47:03
Um, I mean, look, it's, I think the optics
of, of the, you know, the first and only
00:47:10
female CEO of an auto company, um, not
saying they keep her if she wasn't doing
00:47:16
the job because of that, but, um,
00:47:20
You know, it's be tough for them to make
that call if there wasn't like a serious,
00:47:27
like something seriously wrong with the
company.
00:47:29
Like they can't just say, yeah, we need a
change in direction.
00:47:32
You're not quite it.
00:47:33
I mean, look, they can do whatever they
want, but I don't think, I don't think
00:47:37
that's why they do it bottom line.
00:47:41
Bottom line.
00:47:41
going to say that's fair.
00:47:42
And I mean, she's been CEO for a decade
now, which is a lot longer than some other
00:47:46
former GM CEOs.
00:47:48
And look, the so, you know, if the board
wants to make a case that they keep her in
00:47:54
place, and the company's profits and cash
flow are really, really strong.
00:47:58
Their core business does great.
00:48:00
And they, you know, and so her vision,
which started with making this a better
00:48:07
run, more profitable car company, look,
their vehicle quality and productivity,
00:48:12
all the stuff that had to be fixed when
she got in has been fixed.
00:48:16
So there are a lot of things on that side
of the ledger that the board would point
00:48:19
to say, you know, that this is why we
don't throw her out.
00:48:24
I'm not saying that because she's a woman,
they wouldn't fire her if she needed to be
00:48:29
fired.
00:48:29
I'm saying it's that it's, there would
just be more of a magnifying glass on any
00:48:39
decision they made like that.
00:48:41
So they would
00:48:45
The only thing I could see is, let's just
say, you know, this issue with getting the
00:48:49
vehicles out, if this persists or if
there's like some terrible situation where
00:48:57
there's a bunch of fires and some nasty
recall like we had with Bolt or with the
00:49:02
ignition switch over a decade ago, you
know, something like that and, you know,
00:49:08
she had mishandled it or was responsible
for it or if they just decided they needed
00:49:11
somebody else who could do...
00:49:13
could fix that sort of thing.
00:49:17
I think something like either just failure
to get the EVs out the door and see this
00:49:20
mission out or some other kind of
cataclysmic sort of thing.
00:49:27
Cause she's got three years and look, I
think she would want to stick around to
00:49:31
fix these problems and at least see this
part of her vision out.
00:49:34
That's what I think.
00:49:36
Yeah, I think those are really good
points.
00:49:38
And yeah, I think you're totally right.
00:49:39
Like if it was an ignition level issue,
like essentially what kind of is the
00:49:44
reason she got on the job previously, that
level of optics, that negative where they
00:49:48
kind of have to make some big changes, I
could see that.
00:49:51
But I think you're right and had what we
have discussed around like the electric
00:49:56
vehicle growth trajectories stay the same.
00:49:59
I think there'd be a lot more pressure on
her around that.
00:50:01
But since we have kind of seen that pulled
back a bit.
00:50:05
Um, I think the points you're talking to
exactly kind of put her in a pretty safe
00:50:10
space for that.
00:50:10
I just wanted to ask him to get your
thoughts on this.
00:50:13
So he's been covering it for sure.
00:50:16
years from turning 65.
00:50:18
Like, how long does she stay?
00:50:20
And, you know, because they've had these
problems, do they throw her out?
00:50:24
I mean, there's no indication they would.
00:50:26
And, you know, look, you know, they've
approved this $10 billion share buyback
00:50:33
and the financial moves that she's made
and, you know, some of the, you know,
00:50:39
promoting some young stars at the company
at the end of last year.
00:50:43
So, you know, they have to be behind her
if they're approving some of these big
00:50:46
moves.
00:50:47
So she's, you know, she's got time.
00:50:49
Now, look, if, if the board comes out and
issued a statement soon saying they fully
00:50:53
back her, that probably means she's going
to get fired.
00:50:56
Now I'm being sarcastic, but it's like,
you know, whatever, whatever puts out a
00:51:02
statement saying that the C we love the
CEO, they're doing a great job.
00:51:05
They're usually gone within a month.
00:51:07
Right.
00:51:07
No, right.
00:51:07
You know, I.
00:51:11
I could see her finishing the job at 65
pretty easily.
00:51:16
I mean, we're already less than three
years from that.
00:51:20
Right.
00:51:20
And I think when we've talked about very
briefly, but obviously we've been focused
00:51:25
more on the EV challenges they've been
having.
00:51:27
But as you mentioned earlier, cruise and
the autonomous vehicle program there, when
00:51:32
you were writing the book and just going
through that, obviously.
00:51:37
I don't know enough about the team.
00:51:39
I don't know enough about what their
program is doing or what the state of it
00:51:44
is.
00:51:45
As far as autonomous ride hailing
services, it was good.
00:51:49
It seems like Waymo even before they, uh,
kind of shut down cruise was, I think had
00:51:55
to kind of the better long-term strategy,
just personally looking from the outside.
00:51:59
And now that there's so much kind of
negativity, autonomous vehicle space,
00:52:04
especially has really cooled off in the
last 18 months, just from what we've seen
00:52:10
externally about like the head goes, then
they move all these other people.
00:52:14
And now it's like every couple of months,
there's a new announcement.
00:52:17
Now they're laying off another 24%.
00:52:19
What do you think the future for that
program is?
00:52:23
Like is it they're just kind of slowly
trying to just say, you know what, we gave
00:52:27
it a good shot and we want to get rid of
it and try not to make as big a hubbub
00:52:32
about it.
00:52:32
I mean, with even Apple just the other day
announcing that they're stopping their
00:52:36
program.
00:52:36
Like what in your research and kind of
like connections there do you think is the
00:52:42
current sentiment and maybe future for
that program at GM?
00:52:46
Yeah, we just broke a story last week that
they were resuming testing with safety
00:52:51
drivers.
00:52:52
Probably Houston or Dallas, they're
looking at those two markets.
00:52:56
Texas is a pretty easy place to run AVs.
00:52:58
The regulatory environment is pretty lax,
particularly compared to California.
00:53:02
So they're going to put their foot back in
the pond here and see what they can do
00:53:09
with it.
00:53:13
If they were going to shut it down, I
think they already would have, because
00:53:15
they were spending a lot of money on this
and their investors did not like that.
00:53:18
You know, when they, one of the things
that pushed their share price up recently
00:53:23
was the earnings were good.
00:53:25
You know, they had done all these share
buybacks and everything and they reduced
00:53:28
spending in Cruz.
00:53:30
And if you look at the valuation of GM, in
fact, Paul Jacobson, the CFO has been
00:53:34
saying this for about a year.
00:53:35
He said, look, if you buy GM now, you're
getting GM at a cheap price historically
00:53:39
and you're getting Cruz for free.
00:53:42
Which.
00:53:42
What that says is investors place no value
on it.
00:53:45
Um, and really, if you look at the other
autonomous vehicle stocks like Aurora, and
00:53:52
these are all trading at next to nothing
and, you know, none of the privately held
00:53:57
AB trucking companies, some of which are
doing some pretty interesting things,
00:54:00
they're not going public right now because
the market doesn't like any of this stuff.
00:54:03
So, um,
00:54:06
If so, point is if GM wanted to shut it
down, they could, they could shut it down
00:54:09
right now.
00:54:10
And I think their investors would like it.
00:54:12
The reason I don't think they will is one,
they do believe in the technology and in a
00:54:16
way, you know, what GM shutting the whole
thing down and a lot of the bad PR and
00:54:22
problems they've got governance problems.
00:54:27
It's almost because they've had one
incident that was horrific, also really
00:54:35
rare.
00:54:35
And now that's sort of their line.
00:54:36
That's not what I'm trying to do.
00:54:38
It's just like the technology was actually
working fairly well.
00:54:42
I don't think it was working as well as
way most, but it was working fairly well
00:54:46
in terms of safety and being able to do
its job.
00:54:49
So they see something worth saving.
00:54:52
And then look, the other part is when you
spend 10 billion dollars in buying back
00:54:55
your
00:54:56
What you're saying is we don't have a good
place to put that money that will grow the
00:55:01
business.
00:55:03
So, if they didn't spend whatever I think
the remaining is going to be one and a
00:55:06
half between one and a half and two
billion a year on cruise instead of two
00:55:09
plus, they would just buy back more shares
or raise the dividend, right?
00:55:15
And I don't think that's going to do much
for investors.
00:55:16
When you're already returning 10 billion,
returning 11 is not going to get them that
00:55:19
much more in love with your stock.
00:55:22
So, you know, they've done what they need
to do to return money to their owners.
00:55:26
And, you know, other than continuing the
EV push, Cruz is really the one other
00:55:32
place where they see some potential growth
in revenue, along with software services,
00:55:38
but that's a different issue and was never
as big a part as Cruz was supposed to be
00:55:44
in this big plan they had to grow.
00:55:46
So, you know, and look, there aren't that
many, there are two Robotech mouth, May
00:55:50
Mobility, there are three Robotexy
companies in the US left standing.
00:55:54
If you got the money,
00:55:56
Why not keep trying to develop it?
00:55:58
They're just gonna have to do it slowly.
00:56:00
I also think long-term, if RoboTaxi
doesn't work out as a business, and that's
00:56:06
different than the technology working, the
technology could work, but you still have
00:56:10
to have a business that makes money.
00:56:12
That means managing the fleet has to be
cheaper than what you can get people to
00:56:17
pay you.
00:56:19
And I'm suspicious of that, by the way,
because I don't think consumers care.
00:56:23
whether it's, you know, Vinny Romano from
Queens in the yellow cab or Uber and Lyft
00:56:29
drivers or a robot driving that car.
00:56:31
They don't care.
00:56:32
As long as it's safe on time, get
somewhere they want to go.
00:56:34
Um, and I'm an Italian American so I can
see Vinny Romano.
00:56:40
Um, and so I, you know,
00:56:44
I mean, one of my favorite things, I used
to go to New York all the time for work
00:56:48
trips.
00:56:48
And so like, if it was between a yellow
cab or I always had infinitely more fun
00:56:53
taking the cabs in New York than doing an
Uber.
00:56:57
But for the most part, consumers don't
really care.
00:57:00
And so, you know, what's the draw for the
Robotex unless it really is cheaper, and
00:57:05
then if it's cheaper, you have the cost of
running the business has to be cheap.
00:57:10
So it's got to be more than that.
00:57:11
And what could end up being if Robotex
just isn't a great business is, you know,
00:57:17
GM is theirs, being the first car company
to sell, you know, personally owned self
00:57:22
driving vehicles.
00:57:24
And, you know, consumers do like stuff
like autopilot, like GM supercruise, like
00:57:28
Ford's blue cruise.
00:57:30
You know, they like those systems and they
pay extra money as a subscription for them
00:57:35
in most cases or for the hardware.
00:57:37
So there's a business there.
00:57:38
And if you have something that's closer to
fully autonomous, I think people will pay
00:57:41
for that.
00:57:42
And there are other things, you know,
there are shuttles at certain places, you
00:57:45
know, airports, entertainment venues, the
Bourbon Trail, you name it.
00:57:49
There are places where that stuff makes a
lot of sense.
00:57:53
And there is a potential business for
fleet owned or personally on self-driving
00:57:57
vehicles.
00:57:58
And so I think they're developing it for
that reason too.
00:58:01
So if they don't have a robo taxi in every
city, so what?
00:58:04
They'll be selling these vehicles
somewhere somehow.
00:58:07
You know, Dan Avin, who used to run crews
for GM said something to me once.
00:58:10
And I think.
00:58:11
It's still probably right, which is, and
this is back when we had like, you know,
00:58:15
more than a dozen autonomous vehicle
companies getting funding.
00:58:18
He said, look, we don't need 12, 14,
whatever AV stacks.
00:58:23
It'll end up being like operating systems
where you've got Android and iOS, right?
00:58:27
You need like two or three.
00:58:29
That's not counting trucking.
00:58:30
Um, but so maybe you need a couple of
trucking and a couple for personally owned
00:58:34
vehicles.
00:58:35
So when you label, why didn't you,
00:58:37
you have commercial, I mean, that makes
sense.
00:58:40
Yeah.
00:58:42
So, it could go that direction.
00:58:43
Interesting.
00:58:44
Uh, I, I do realize we're kind of coming
up on an hour here, but there are two
00:58:49
areas I didn't want to talk to you.
00:58:51
We focused so much about GM as the company
internally, there's been two big
00:58:56
headwinds, especially in the sales of, uh,
electric vehicles and also just the
00:59:01
manufacturing that are kind of external,
but two things they GM has to work with.
00:59:05
And that is the UAW and dealerships with
the most recent, uh,
00:59:12
kind of strikes and stuff, the union
challenges, where, where do you see, do
00:59:17
you see that there is a viable way?
00:59:22
Should electric vehicles kind of get that
momentum again?
00:59:27
And if we do see Chinese and other cheaper
vehicles come in, do you think that there
00:59:32
is a strong or do you think they're the
current path is can be done with the UAW
00:59:39
or do you think that's going to cause?
00:59:41
a lot more headwinds and fighting between
GM and the UAW to get to those cost
00:59:46
competitiveness and the traditionally less
manufacturing needs of EVs.
00:59:54
I mean, so coming out of the strike, we
just had one of the big things that I
00:59:58
think kind of set the union's nerves at
ease a bit is, you know, the basically
01:00:03
brought the union into the battery plants.
01:00:06
And that was their one big fear is that
all these engine and transmission jobs
01:00:10
and, you know, fuel systems, emission
systems, all that stuff, they go away and
01:00:16
then they buy batteries and electric
motors from Asia or something like that.
01:00:19
So
01:00:20
between unionizing the battery plants and
the Inflation Reduction Act, which is
01:00:25
mandating that in order for all this money
to come in from the government, you have
01:00:28
to build it here.
01:00:30
That cut the union on that part of the
deal.
01:00:33
Now, the other part, will EVs be easier to
make?
01:00:37
There are a lot fewer parts and they're
doing things with how Tesla does vehicle
01:00:40
bodies.
01:00:41
And I think over time, that could reduce
the amount of labor needed.
01:00:46
That's kind of always happened through
efficiencies and automation and everything
01:00:49
else.
01:00:51
Does that accelerate that?
01:00:52
I'm not so sure, but I mean, if I had to
guess and say, yeah, probably will.
01:00:57
So, you know, that could be the fight for
down the road.
01:01:00
The way that car companies have always
handled this, they just, they retire
01:01:03
people out and don't replace as many of
them.
01:01:06
And although with this one, you know, this
union contract was a pretty good one for
01:01:10
the union.
01:01:10
It was pretty rich.
01:01:12
And John Fain, the UAW president kind of,
you know, he...
01:01:16
some very tough rhetoric for these
companies and things got pretty tense.
01:01:19
So I think what you'll probably see over
time is that companies remember these
01:01:28
things and if they have to downsize it,
wouldn't be their Mexican operations, put
01:01:32
it that way.
01:01:33
But look, if Chinese vehicles get here in
big numbers and they're a lot cheaper,
01:01:37
then Katie bar the door for everybody
because that's...
01:01:41
That's going to be a problem.
01:01:42
Look, Mary Barra said on the earnings
call, when she was asked about the Chinese
01:01:45
companies coming here, said there are
certain things about the Chinese market
01:01:49
that make building and developing vehicles
apparently cheaper, something to that
01:01:53
effect.
01:01:54
And it's not just labor.
01:01:56
So would the Chinese vehicles be at as big
a discount here as they are there?
01:02:04
I'm not sure.
01:02:05
I think they will be cheaper.
01:02:06
I think we can.
01:02:07
We can rest assured on that because
they've got more scale and more expertise
01:02:10
with EVs.
01:02:11
But yeah, if they can get into the US
market for a lot less money, you know, the
01:02:16
union's going to have a problem and so are
the companies.
01:02:19
Yeah, that's what's kind of been
interesting with the recent announcement
01:02:22
of BYD and others kind of moving to
Mexico.
01:02:24
So it kind of gets around a couple of the
challenges of selling into the US.
01:02:29
BYD even said they're like, oh, no, we
don't have any interest in doing that just
01:02:33
yet, we're just selling to the Mexican
market.
01:02:36
But it is hard.
01:02:39
Yeah, that's true.
01:02:40
That's that's true.
01:02:41
I think this thing I saw, she was in
Mexico City town, but you're right.
01:02:44
It's it is kind of south of the border and
then some.
01:02:48
But it's hard to believe that, okay, maybe
that's the case for the next few quarters.
01:02:53
But once those factories are up and
running, they're not going to start
01:02:57
seriously looking more at moving into the
US and trying to really compete there.
01:03:03
you saw what Biden said the other day
where, you know, EVs pose a national
01:03:06
security threat.
01:03:07
So, you know, that's, that's a way to levy
more tariffs.
01:03:10
Are you giving what, but the Biden
administration strategy looks like it's
01:03:14
going to be, it's used protectionist
measures to safeguard the U S industry
01:03:20
until they can get caught up and, and
compete because right now it doesn't look
01:03:26
like they can compete.
01:03:27
Otherwise you would need protectionist
measures.
01:03:30
Yeah.
01:03:31
And given that we're going into an
election here, it's kind of all up in the
01:03:34
air as to what that's going to be for the
future.
01:03:36
But, uh, re real briefly, I guess the last
thing would be just to talk about the
01:03:40
dealerships real quickly and your thoughts
on, obviously, uh, when GM was, Ford
01:03:49
obviously saw this too, when they were
kind of pushing some of the programs for
01:03:51
their electrification and being, uh,
certain dealerships that would push
01:03:55
electric vehicles or others, you saw a
bunch of dealerships drop out, especially
01:03:59
with Cadillac.
01:04:01
And so I'm kind of curious as to what you
think that means for GM long-term.
01:04:08
I mean, a big part of the actual, it's one
thing to you, they're having trouble
01:04:12
making the EVs.
01:04:13
Once you start making them, then you have
to actually be effectively moving them.
01:04:17
And that falls to something out of their,
a whole lot of it out of their control
01:04:22
with the dealerships.
01:04:23
And where do you think the future of that
is and possibly what GM can do to help
01:04:29
ensure their.
01:04:30
EVs that they start making are successful
and start moving other than just saying
01:04:34
they have a great starting price.
01:04:35
look, it's a great question.
01:04:37
And it's something they need to really get
on top of because, you know, we've seen
01:04:40
skepticism from the dealers, right?
01:04:42
You know, they were, uh, they were already
pushing the federal government, uh, on
01:04:48
this thing.
01:04:49
You know, if dealers, dealers don't like
change, cause that means they have to
01:04:52
invest more money and change how they do
work on, on the showroom floor.
01:04:56
Uh, they've, you know, they've been that
way.
01:04:59
However, if something sells and they can
make money on it, they'll be all over it.
01:05:04
So.
01:05:05
You know, we get down to, you know, the
big challenge for the legacy car companies
01:05:10
is once they presumably get to the point
where they're building a lot of these,
01:05:15
they do have to market them.
01:05:17
They really have to, which is a challenge.
01:05:21
They have to get people who shop EVs to
look at their brands.
01:05:25
Right.
01:05:25
Right now it's mostly Tesla and it can be
done.
01:05:30
Ford did a very good job getting awareness
for the Lightning.
01:05:33
So it certainly can be done, but they're
having issues keeping demand up for that
01:05:36
as well.
01:05:37
I think it's a function of price.
01:05:38
But, and look, they're not going to like
this because they've never had to do
01:05:43
marketing for BP and Exxon and the filling
stations, but they're going to have to do
01:05:48
something to get awareness for charging.
01:05:50
So, and it can't just be, look, we're
working with 12 different apps you can use
01:05:54
to charge.
01:05:55
They're going to have to convince people
that charging is not going to be a problem
01:05:59
for them.
01:06:00
So, you know, this is a different
marketing challenge than they've had, but
01:06:03
they have to do it.
01:06:05
Because I don't think they're not going to
be able to solve any resistance from
01:06:09
dealers on selling EVs just by talking to
the dealers.
01:06:12
I mean, there are dealers who are into it,
especially those who are in markets where
01:06:17
people like EVs.
01:06:18
And luxury dealers are into it because
they know luxury buyers like EVs.
01:06:22
But they, you know, they're really, as we
try to, as we see them try to penetrate
01:06:28
the mass market.
01:06:30
that they're just going to have to have
vehicles that sell because, you know, if
01:06:35
you asked a dealer 25 years ago, do you
want to invest a bunch of money in, uh, in
01:06:41
Hyundai, you know, after it wasn't the
Excel that had all those quality problems
01:06:45
in the nineties, um, you know, 25, 30
years ago, how can I use you in this
01:06:50
Hyundai franchise?
01:06:51
They'd say, no, you have one crappy
compact with bad quality problems.
01:06:54
Forget about it.
01:06:55
But now, you know,
01:06:57
Hyundai sales are pretty strong, they're a
big piece of the market and a lot of
01:07:00
dealers are investing in those franchises.
01:07:02
Those guys, you know, the money talks and
those guys follow it.
01:07:05
So you know, they've just got to make
products people want, they have to market
01:07:08
them, they have to market the whole
charging experience, get people used to it
01:07:11
and that'll solve any issue with the
dealers.
01:07:13
Those guys like selling cars and that's
all there is to it.
01:07:17
Well, it's interesting you mentioned
Hyundai and Kia because yeah, both of them
01:07:20
have had pretty successful electric
vehicles just from a product standpoint.
01:07:24
And so it makes it a lot easier to then
sell them.
01:07:27
One thing I've heard, and I became a
curious on maybe your thoughts of this is
01:07:30
like a lot of very electric vehicle
advocates are pushing for the idea.
01:07:34
Well, the OEM should just spiff electric
vehicles more instead of the regular
01:07:41
combustion engine cars at dealerships.
01:07:43
And my immediate thing is like, well,
okay, so they have to now even pay more.
01:07:46
what thin margins and challenges they had
with EVs just becomes even that much more
01:07:50
exponential.
01:07:52
I think it totally goes to what you're
saying about like, yeah, a salesperson is
01:07:56
going to be incentivized.
01:07:58
If they have to do more work, but there's
a bigger payoff, yeah, that probably would
01:08:01
work.
01:08:02
But do you think that is a realistic
possibility with just the other financial
01:08:09
challenges I guess that some of these
companies are having with just getting the
01:08:13
EVs off to the dealerships?
01:08:16
You know, they may have to invest some
money here and, you know, maybe, you know,
01:08:22
they add incentive.
01:08:23
I mean, look, there's a lot of government
money incentivizing these things already.
01:08:27
But to get dealers on board, do they have
to raise the markup that the dealers get
01:08:32
to keep?
01:08:33
I mean, it's a possibility.
01:08:35
The dealers don't like when they kind of
they do stuff like that.
01:08:39
The dealers want to kind of manage that
side of it.
01:08:42
But.
01:08:42
I mean, that's one thing they could do.
01:08:44
And look, the car companies have been
cutting the markup that the dealers get to
01:08:49
keep for a long time.
01:08:51
And so, you know, if you push that in the
other direction for EVs, that could move
01:08:56
the needle.
01:08:57
Um, I think they've got programs to help
them invest the money they need for the
01:09:02
repairs and service base and that sort of
thing.
01:09:04
Uh, but it is an investment for these
guys.
01:09:06
So, um, you know, it.
01:09:09
to get them all onside, they're going to
have to do it.
01:09:11
Look, you've seen GM with its Cadillac and
Buick dealers, you've seen them thin the
01:09:16
herd because some of them, they just
basically bought them out if they didn't
01:09:20
want to sell EVs.
01:09:23
And in some ways it's better because their
dealer network was too big on some markets
01:09:30
anyway.
01:09:30
So the surviving dealers just sell more
cars and they're happy, because they're
01:09:35
getting more throughput in their store.
01:09:37
more profit for them.
01:09:39
So, you know, I think they may have to
create these incentives, but you know,
01:09:44
look, the biggest thing they can do is
just make a cool EV that people want.
01:09:48
And I mean, it would sound simple, but you
do that.
01:09:52
And the dealers, the dealers, if
something, if customers want to move it,
01:09:56
when I talk to dealers, the biggest
complaint is that a lot of them will tell
01:09:59
me the same thing.
01:10:00
You know, people aren't coming in here
asking us for EVs.
01:10:03
And I mean, the good or bad is if it's a
hot car, they can mark it up.
01:10:07
And exactly.
01:10:09
So, uh, I think that is really, uh, I, I
completely agree with you.
01:10:13
I think the challenge and that's obviously
why Tesla has had so much success along
01:10:17
with some of the other startups is good
product.
01:10:19
You have a product that looks good, that
works well, easy to use.
01:10:23
Uh, and some of it obviously is
generational connection, but yeah, I, I
01:10:28
think that is the biggest challenge that
some of these legacy automakers have.
01:10:31
I.
01:10:32
I agree with you, the lightning's a good
product, but it's way too for what it is.
01:10:35
It's priced way too high.
01:10:36
That's, yeah, the price is still way too
big for most people on a lot of these EVs.
01:10:42
And, uh, I guess one last thing, I'm
sorry.
01:10:45
Uh, then we'll let you go with the
announcement yesterday of, uh, for now
01:10:49
being able to use the Tesla charging
network.
01:10:52
Do you think, uh, I think that does kind
of help actually with some of the
01:10:55
education and just kind of off-line at the
now dealerships instead of having to go
01:10:59
really deep into it was like, Hey, you can
use the Tesla ones.
01:11:01
They work.
01:11:02
Do you think that is a wise long-term
strategy for these companies that
01:11:08
essentially every.
01:11:09
time that someone goes on a road trip or
needs to charge somewhere.
01:11:13
They're using a literally a competitor's
product and then sees the.
01:11:16
Okay, I've asked them this question myself
and they all tell me, you know, it's not
01:11:20
it's not a problem But you know when
you're when you're arch rival and selling
01:11:24
EVs, it's their brand name on the charger
that works Look that is a marketing
01:11:30
advantage for Tesla You know one
underrated thing about Tesla's they're a
01:11:33
great marketing company and Elon Musk is a
great marketer himself And look in some
01:11:38
ways he you know, he can be his own worst
enemy But the guys just you know, he and
01:11:43
his company always have attention, right?
01:11:47
I think they are kind of the example of
even bad news is good news.
01:11:52
Yeah.
01:11:54
So look, if people like the other EVs,
they'll buy them and just use Tesla's
01:12:05
charger knowing that that's the place to
go charge.
01:12:10
And look, Tesla will make some money off
of this because they'll build more
01:12:12
chargers and they'll make some money off
of this.
01:12:15
It's not like the charging business isn't
a huge moneymaker for them.
01:12:18
But
01:12:19
it will make them some money.
01:12:20
Yeah, I think as I look at the market, I
mean, other than Cybertruck, you know,
01:12:25
Tesla's vehicles, you know, you're looking
at two big, two sedans, two crossovers
01:12:32
with pretty much the same styling.
01:12:34
So, you know, as we get more vehicles from
other companies with from brands that
01:12:39
people are already loyal to, you know, I
think they can overcome the fact that
01:12:46
people are going to go to Tesla for
charging.
01:12:48
And the other thing is like people go to
so many different chargers wherever they
01:12:52
needed, wherever it's convenient that I
think they'll be okay with it, but
01:12:59
I think there's truth to that and
definitely in the long term, but as
01:13:02
someone who's done a lot of UV road trips,
I've been consistently disappointed by
01:13:07
the, oh yeah.
01:13:09
And every time it's like, every time I try
to give them the benefit of the doubt and
01:13:12
I'm like, well, actually this is a higher
power charge when technically it'll be
01:13:15
like, it'll save me 10 minutes.
01:13:17
It always costed me 20 minutes.
01:13:18
Um, and I usually just ended up driving to
the Tesla one down the road anyway.
01:13:22
But, um, I, I guess one comment on that is
I, I do think it was really,
01:13:26
It's interesting that Jim Farley and the
four team did kind of position.
01:13:30
I thought they were vocal about this.
01:13:31
I haven't really heard a similar thing
from Jim, but they looked at it as.
01:13:34
Actually, it's a great opportunity to get
in with Tesla and like see Tesla drivers,
01:13:38
then see our products on a regular basis
and almost kind of looked at as an
01:13:42
acquisition or whether that is them trying
to do market and position.
01:13:46
Why they have to do this.
01:13:48
I don't know, but at least the strategy of
it did sound kind of good.
01:13:50
Um, and then the other thing that I hope.
01:13:53
I'm imagining GM will do is the fact that
they included the plug and charge
01:13:57
protocol.
01:13:57
So when you plug in a four DV, it charges
pretty much exactly this.
01:14:02
You don't have to use the app.
01:14:03
You don't have to kind of do all the other
stuff that these other chart.
01:14:06
I mean, once again, which makes the
charging network for Tesla that much
01:14:08
better.
01:14:09
But, um, with that, David, I've taken
plenty of your time today.
01:14:13
I really do want to say thank you for all
this has been really fascinating.
01:14:16
And I'm sure listeners would have really
enjoyed your perspective and just kind of
01:14:20
learning more about.
01:14:21
the GM backstory and challenges they faced
with electric vehicles and where they're
01:14:25
going.
01:14:26
So I'll let you get going and thank you so
much for joining us today.
01:14:34
As we wrap up today's episode with David
Welch, we hope you've found this episode
01:14:38
of Grid Connections both insightful and
inspiring.
01:14:41
David's expertise and his book Charging
Ahead offer a fascinating glimpse into the
01:14:45
challenges and opportunities facing
General Motors as it tries to reinvent
01:14:49
itself in the current automotive industry.
01:14:52
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