GM Financial could be ready to issue a green bond supporting electric vehicle financing by the end of 2023, CEO Dan Berce said last month.
The captive finance company and General Motors have committed to a 2022 Sustainable Finance Framework outlining how they would borrow funds to finance eligible green or social projects, such as building or developing EVs. In July, GM announced it would issue $1 billion of 5.4 percent bonds and $1.25 billion of 5.6 percent bonds for this work.
GM Financial said in the framework it would use green bond revenue for loans, leases and "other financing products offered to retail customers, dealer financing and fleet financing as well as financing of alternative business models that increase adoption of Clean Transportation Solutions." This could include financing battery-electric and fuel cell cars and trucks, other zero-emission vehicles (electric delivery carts were used as an example) and charging infrastructure.
But the automaker's captive finance company isn't yet ready to sell green bonds, according to Berce.
"We don't have the scale or critical mass of EVs in our portfolio yet to really justify a bond," he told the J.P. Morgan Auto Conference on Aug. 10.
GM Financial's book of EV debt remains too small to serve as collateral, even with all the Chevrolet Bolts the company has financed, according to Berce.
But as the captive finances more GMC Hummer EVs, Cadillac Lyriqs and Silverado EVs, GM Financial will reach the point where it could "roll out a billion-dollar green bond, for instance," Berce said.
Berce told the conference that GM would probably not reach "critical mass" for a green bond in the next 12 months, but investors wouldn't need to wait much longer than that.
"It's clearly something that latter half of '23 into '24 we'll be active in," Berce said.