CEO of GM Financial: Green Bonds in over a year; more funded electric vehicles needed

GM Financial could be ready to issue a green bond supporting electric vehicle financing by the end of 2023, CEO Dan Berce said last month.

The captive finance company and General Motors have committed to a 2022 Sustainable Finance Framework outlining how they would borrow funds to fund qualifying green or social projects, such as building or developing electric vehicles. In July, GM announced that it would issue $1 billion in 5.4% bonds and $1.25 billion in 5.6% bonds for this work.

GM Financial said in the framework that it would use proceeds from green bonds for loans, leases and “other financing products offered to retail customers, dealer financing and fleet financing as well as financing. alternative business models that increase the adoption of clean transport solutions”. This could include funding battery and fuel cell electric cars and trucks, other zero-emission vehicles (electric delivery carts were used as an example), and charging infrastructure.

But the automaker’s captive finance company is not yet ready to sell green bonds, according to Berce.

“We don’t yet have the scale or the critical mass of electric vehicles in our portfolio to really warrant a bond,” he told the JP Morgan Auto conference Aug. 10.

GM Financial’s debt book on electric vehicles remains too small to serve as collateral, even with all the Chevrolet Bolts the company has financed, according to Berce.

But as the captive finances more GMC Hummer, Cadillac Lyriq and Silverado electric vehicles, GM Financial will reach the point where it could “deploy a $1 billion green bond, for example,” Berce said.

Berce told the conference that GM likely won’t reach “critical mass” for a green bond in the next 12 months, but investors wouldn’t need to wait much longer than that.

“It’s clearly something we’ll be active in the second half from 23-24,” Berce said.

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