By installing the capacity to build two million electric vehicles annually by 2025, American automaker General Motors (GM) is pursuing its goal of making its global products and operations carbon neutral by 2040, and eliminating tailpipe emissions from its new light-duty vehicles by 2035. This all-electric vision is now further supported by a debut green bond, issued under GM’s new Sustainable Finance Framework in August.
The US$2.25 billion dual-tranche green bond comes as the US passes a tipping point for electric vehicle adoption: 5% of new car sales are powered only by electricity. To match the growing demand, US carmakers have dramatically increased their EV investments, reaching US$65 billion in 2027, according to BloombergNEF. GM alone has increased its planned investments in EVs, fuel cells and autonomous vehicles to US$35 billion by 2025.
GM’s investments span its entire EV portfolio, from its offerings in the luxury, SUV and truck segments across iconic brands like Chevrolet, Cadillac, GMC and Buick, to BrightDrop, an innovative EV business in the light commercial delivery market that recently completed a launch order from Federal Express. The investment also extends to Cruise, GM’s autonomous ride-share subsidiary, which in June earned regulatory approval to charge for driverless rides in San Francisco.
General Motors’ inaugural Green Bond is testament to the company’s continued efforts to grow its electric vehicle platform. Its Sustainable Finance Framework shows its commitment to transition with high standards of transparency and disclosure.Anne Van Riel, Head of Sustainable Finance Capital Markets Americas, BNP Paribas
Investing in zero emissions
GM is one of several automakers globally that has recently issued green bonds to drive investment in its transition to electric vehicles, including Ford, Honda and Daimler. In GM’s case, the issuance is unique, in that the proceeds of its green bonds will be allocated to investments that touch every part of the clean transportation ecosystem. This includes:
- Zero-emission vehicles
- Battery technology, battery storage and battery management systems
- Fuel cell technology
- Batteries, battery cells, fuel cells, electric motors and other components used in zero-emission propulsion solutions for the automotive and other industries
- Charging solutions and equipment
- Microgrid and Vehicle-to-Grid
“Not only will our rapid scaling of EVs and Autonomous Vehicles drive growth, but we believe our focus on sustainability, equity and inclusion can have significant and profound benefits for society,” says Paul Jacobson, GM’s Chief Financial Officer. “We saw strong investor support for the offering – our first capital markets activity supporting the company’s EV and ESG targets – which further supports our sustainability strategy and brings us even closer to achieving our vision.”
Proceeds are expected to be used for a range of projects that include investments in Factory ZERO, GM’s first fully-dedicated EV assembly plant in Detroit, Michigan. BNP Paribas is Co-Sustainability Agent on GM’s framework and Active Bookrunner and Billing and Delivery Agent on the green bond.
Building an equitable electric future
GM’s Sustainable Finance Framework also covers the company’s mission to ensure the all-electric future is accessible by and provides equitable opportunities for all the communities that it serves. Moody’s provided the Second Party Opinion (SPO) on the framework, assigning its highest ratings of Advanced on its ‘Contribution to Sustainability’ as well as on its ‘Expected Impact’.
In addition to the green projects outlined in the framework, it also outlines how GM will fund projects promoting socioeconomic advancement and empowerment. These investments can range from increasing the capacity and capability of diverse suppliers and dealerships to workforce development programmes, inclusive hiring initiatives and dedicated recruitment programmes.
To ensure transparency and public reporting on its ESG programme, GM will publish an annual sustainable finance report, available on its website.