What’s going on?

General Motors (GM) announced it’ll boost its spending on electric vehicles (EV) through 2025.

What does this mean?

• 30 news EVs by 2025 are GM’s goal when investing a total of $27 billion.
• Further radius than Tesla: since most of GM’s new vehicles will feature its upcoming Ultium battery cells, they’ll reportedly have a range of up to 450 miles – even further than the 402-mile Tesla’s Model S Long Range Plus.
• In-line price: GM’s new battery cells are said to bring the price of its EVs in line with its current gas-powered models by 2025.

Why should I care?

For markets: Developing one’s own battery.

• Growing pressure to phase out gas engines: the UK banned the sale of new petrol and diesel cars from 2030 onward.
• Competition for EV is therefore fierce: GM’s EV spending is dominated by Tesla and Volkswagen, which is planning to invest $86 billion into EVs over the next 5 years.
• All 3’s strategy is developing their own batteries – the most expensive component and most influential over profitability – rather than buying from 3rd-party suppliers.

The bigger picture: ESG movement

• This year, investors have been allocating more than twice to BlackRock’s funds that invest in climate change.
• Companies that focused on “stakeholder capitalism” (serving the interests of all stakeholders) have been outperforming their stock market rivals.

Content source: Finimize. (2020) Power Play. Available at: https://www.finimize.com/wp/news/power-play/ [Accessed on November 24, 2020]