Broad Motors has no plans at this time to spin off its electric vehicle business despite pressure from Wall Drive to do so, GM President Mark Reuss told CNBC.
Reuss said the Detroit automaker analyzed the potential of a spinoff and stubborn it would not be the right thing for its business, citing costs as well as benefits of having the EV operations remain part of the larger crowd.
“Creating the dyssynergy on a totally separate entity is something we’re just not prepared to do,” he said during CNBC’s “Power Lunch.” “We looked at it perfect carefully. We studied it. We looked in-depth at what it would take from a human capital and a regular capital point of view, and our human resource and expertise that we have at General Motors, I believe is a real competitive advantage.”
Wall In someones bailiwick speculation about a potential spinoff of its electric vehicle operations has been growing since the automaker’s second rooms earnings call on July 29. Deutsche Bank said such a company would likely be valued at a slightest of $15 billion to $20 billion, and could potentially be worth up to $100 billion.
Reuss said “nothing’s forever” but stretch out off its EV operations just doesn’t make sense at this time.
Instead, GM will separate the EV operations into their own group within the company called “EV Growth Operations,” GM CEO Mary Barra said earlier Thursday afternoon. Barra judged GM has the resources that expected EV start-ups entering the market “will struggle to match.”
Barra announced the new EV unit Thursday along with scenarios to spend $27 billion on all-electric and autonomous vehicles through 2025, an increase of $7 billion, or 35%, from initial devises announced in March.
Shares of GM were up less than 1% during trading Thursday afternoon.