Just two years after General Motors’ bankruptcy restructuring, it has achieved another milestone – a $7.5 million investment in solar energy system maker Sunlogics. This means that GM Ventures gets a stake in Sunlogics, a company that produces solar charging equipment.
The investment is taken from a $200 million venture capital budget that GM is prepared to spend in more than three years to respond to worries that it would lose out to start-up firms like Tesla Motors.
This investment is actually diminutive compared to the $8 billion that GM spends annually on research and development, says Autonews.
But then, this is considered as a radical move that indicates just how committed GM is to venture-style investing. It’s impressive when you consider that one-third of GM is still owned by the U.S. government and is famous for its bureaucracy and its dislike of taking risks.
Steve Girsky, GM’s vice chairman, said that the automaker is “buying options on future r&d.” Girsky is a former New York investment banker who had pushed for the creation of GM Ventures.
He added that people are being encouraged to take risks and to examine what’s outside of GM as there are limitations to internal r&d. The other automakers that have also entered ventures include Volkswagen AG, Honda Motor Co., BMW AG, and Hyundai Motor Co.