Fresh off its AGM victory against energy giant Exxon, activist investor Engine No. 1 announced an investment in automotive giant GM, lauding the company’s leadership position in the industry-wide transformation to battery electric vehicles.
Calling GM’s vision to go all-electric by 2035 “one of the largest transformations in the history of the auto industry,” Engine No. 1 founder Chris James said that the company is creating an opportunity to re-center the battery supply chain in the U.S. James said:
“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 rose to ESG investment fame in its successful battle to win seats on Exxon’s board, aiming to push the oil and gas giant to act on the emerging global energy transition to clean and renewable sources of energy. The campaign gained backing from numerous high-profile investors including CalPERS, CalSTRS and the New York State Common Retirement Fund, and BlackRock.
While the firm reported that Exxon’s board refused to meet with any of the investor’s proposed nominees during the proxy battle, Engine No. 1 stated that it has had very “constructive and collaborative” dialogue with GM.
Edward Sun, Portfolio Manager at Engine No. 1, said:
“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. 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.”
Along with the investment in GM, Engine No. 1 announced the publication of “Mobility Becomes Electric,” a new white paper details the need for automotive OEMs to lead the transition from internal combustion engines to all-electric vehicles, in collaboration with Wharton School Professor of Management John Paul MacDuffie. Click here to view the white paper.