SAN FRANCISCO--(BUSINESS WIRE)--Engine No. 1, an investment firm that drives performance by tying companies’ social and environmental actions to economic outcomes, today formally announced its investment in and support for General Motors Co.’s (GM’s) vision to transform its business to create an all-electric fleet and enhance long-term shareholder value. Along with the announcement, Engine No. 1 published a white paper detailing why the automotive industry must transition to battery electric vehicles (BEVs), what role original equipment manufacturers (OEMs) will play in this transformation, and how it believes GM is committed to leading in the space for decades to come.
“GM’s goal to go 100% electric by 2035 signals one of the largest transformations in the history of the auto industry and creates an opportunity to re-center the battery supply chain in America,” said Chris James, founder of Engine No. 1. “The company’s early lead on battery technology, along with Mary Barra and the board’s leadership, creates tremendous advantages. There’s a narrative that only tech companies can move quickly to embrace change and win as the world changes. We don’t think that’s true. With the right leadership at the board and management level, incumbent companies can transform themselves and their own industry by aggressively investing in the near term in order to drive value creation over the long-term. GM has that leadership.”
Engine No. 1 has had very constructive and collaborative two-way conversations with GM. The firm’s Total Value Framework places a tangible value on GM’s commitment to BEVs and supports the economic case for the company’s transition plans.
Engine No. 1 collaborated with leading auto expert John Paul MacDuffie, Professor of Management at the Wharton School, on the white paper, which details the need for OEMs to lead the transition from internal combustion engines to all-electric vehicles—and the opportunity for increased shareholder value in that move.
“For the first time in years, GM is poised to recapture market share. The company’s advantages in battery technology and its plans to invest $35B in BEVs through 2025 position it well among its competitors,” said Edward Sun, portfolio manager at Engine No. 1. “We believe that GM’s BEV innovation will result in superior cars that are faster, quieter, cleaner and more efficient than traditional Internal Combustion Engine Vehicles (ICEVs). Additionally, OEMs in general have unique capabilities as system integrators, and GM in particular has the right long-term, BEV-only approach to achieve the transition with products that will appeal even more to every kind of customer.”
Examples of GM’s emerging leadership in the transformation of the automotive industry include its investments in localizing its battery plants, its new Ultium battery platform, and its plan to leverage its scale as a competitive advantage. Additionally, the white paper lays out why auto makers like GM stand to benefit from the transition, which is not reflected in current valuation, especially compared to upstart competitors.
About Engine No. 1
Engine No. 1 is an investment firm that is driving long-term value by tying social and environmental commitments to economic outcomes. The firm was founded on the shared belief that a company’s ability to create long-term shareholder value depends on the investments it makes in its employees, customers, communities, and the environment. For more information, please visit: www.engine1.com.