General Motors currently has no plans to outsource its electric vehicle business despite Wall Street pressure, GM President Mark Reuss told CNBC.
Reuss said the Detroit automaker analyzed the potential of a spin-off and determined that it wasn't right for its business. He cited the costs and benefits of keeping EV operations part of the larger company.
"We're just not ready to create dyssynergy on a completely separate unit," he said during CNBC's "Power Lunch." "We've looked at it very carefully. We've studied it. We've looked in depth at what it would mean from a human and regular capital standpoint, and our human resources and expertise that we have at General Motors, are real competitive advantage in my opinion. "
Speculation on Wall Street about a possible spin-off of the electric vehicle business has increased since the automaker's earnings call for the second quarter on July 29. Deutsche Bank said such a company would likely be worth at least $ 15 billion to $ 20 billion, and could potentially be worth up to $ 100 billion.
Reuss said "nothing is forever" but outsourcing its EV operations just doesn't make sense right now.
Instead, GM will split EV operations into a separate department within EV Growth Operations, said GM CEO Mary Barra on Thursday afternoon. Barra said GM has the resources that EV startups that hit the market "will struggle to keep up" would be expected.
Barra announced the new EV unit Thursday along with plans to spend $ 27 billion on all-electric and autonomous vehicles by 2025. This is an increase of $ 7 billion, or 35%, over the initial plans announced in March.
GM's shares rose less than 1% during Thursday afternoon trading.