For the first time ever, General Motors has offered green bonds, joining its rivals in utilizing the sustainable debt market to finance the switch to electric vehicles in order to compete with Tesla. According to data gathered from Bloomberg, it is the second-largest green deal from a US firm outside of the financial industry. A Bloomberg source claims that the automaker divided the $2.25 billion in green bonds into two parts.
Marcus Martin, Head of ESG for commercial products at US Bancorp, said in an interview with Bloomberg, “For the future of not only automakers but just transportation more broadly, it portends very well to see the likes of GM come to market with a green bond.”
The net proceeds from this offering will fund the creation, development, and production of clean transportation technology and supporting solutions.
In 2022 alone, governments and companies have borrowed nearly $264 billion in the global green bond market. This is a 5.3% decrease from last year. Also, Ford Motor Company, Toyota Motor Corporation, and Honda Motor Company, all competitors of General Motors, have already tapped into the green bonds to fund their EV transitions. Last November, Ford raised $2.5 billion in green bonds, and soon after, Honda sold its green bonds at $2.75 billion.
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