EFTA01385145.pdf

24 September 2017 Autos & Auto Parts General Motors Co IFigure 4: Variable Cost per Mile of On-Demand Autonomous Vehicles variable cost (per mile) mapping and data services 0.01 fuel cost 0.11 maintenance 0.12 depreciation (straight line, no residual) 0.24 tires 0.01 operating cost per mile 0.48 fixed cost (per year) insurance 3,000 license, registration, taxes 718 taxi comission inspection 105 annual cost of operation 37,380 annual cost of operation per mile 0.53 Snot MA am" AMC norm. DO *minims Importantly, this $0.53 reflects operating costs for the network operator (e.g. GM's Maven). To determine pricing for this service, we assumed that the service provider would require a 20% return on invested capital (i.e. NOPAT should be $10,000 on a $50,000 vehicle investment), which corresponds to $0.18 per mile for a vehicle generating 56,000 revenue miles per year. We then backed up through the income statement based on a 35% tax rate, $0.11 per mile for SG&A and R&D (12% of revenue on a run-rate), $0.53 per mile for cost of goods sold, to derive a $0.91 per mile retail rate for the customer —very close to the -$0.93 average cost of driving a privately owned vehicle in the top 20 U.S. MSAs, and significantly lower than the average for the dense urban centers within these MSAs (average cost in NYC is $3.35). Figure 5: Based on our estimates of costs involved, we estimated that a mobility service provider should be able to generate a 20% ROIC by charging i $0.91:mile per mile nationwide % of Revenue revenue 0.91 COGS 0.53 59% gross margin 0.38 41% SG&A/R&D @12% of revenue 0.11 12% EBIT 0.27 30% taxes, @35% 0.09 35% NOPAT 0.18 20% implied cost per mile to consumer 0.91 &vas 444 Crew' NNC. An. O8 anti Based on our analysis, assuming a normal distribution for miles driven, and additional feedback from Industry participants (who have been conducting consumer research), we've estimated that approximately 60% of households in Deutsche Bank Securities Inc Page 11 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0086218 CONFIDENTIAL SDNY_GM_00232402 EFTA01385145