General Motors CEO Mary Barra on Wednesday once again pushed back on spinning off its emerging electric vehicle battery business.
Keeping the unit within GM will create more value for the company than spinning it off, Barra said.
“For an electric vehicle, it’s all about the battery,” she said in an interview on “Squawk on the Street.” “I think keeping that technology close and leveraging the deep battery expertise we have at General Motors is the way we’re going to accelerate that value creation.”
Barra touted the company’s plans to sell its Ultium battery cells as well as its Hydrotech fuel cell technology to other companies. It currently has a deal with Honda Motor for two EVs and this week announced the signing of a memorandum of understanding for GM to engineer and supply its Ultium battery and Hydrotec systems for Wabtec freight locomotives.
CNBC’s Jim Cramer told Barra he thought the battery business may be worth more than the whole automaker, which currently has a nearly $90 billion market cap. He questioned why investors shouldn’t be allowed to buy into the battery business.
GM isn’t currently producing its own battery cells for EVs. It has announced plans to build four plants for such production, including two currently under construction in the U.S. through a joint venture with LG Chem, by 2025.
Speculation and pressure from Wall Street about a potential spinoff of GM’s electric vehicle operations has been rampant for some time. Deutsche Bank has said such a company would likely be valued at a minimum of $15 billion to $20 billion, and could potentially be worth up to $100 billion.
GM President Mark Reuss in November said the Detroit automaker analyzed the potential of a spinoff and determined it would not be the right thing for its business. He cited the cost of a spinoff as well as the benefits of having the EV operations a part of the larger company as reasons why it doesn’t make sense right now.