Asset Managers' Misguided EV Bet to Oust Toyota's Chairman
Last month at Toyota’s annual meeting several U.S fund managers including NYC Comptroller Brad Lander and other fund managers from California and Europe failed to oust Toyota's chairman Akio Toyoda off the companies board because the company wouldn't commit to a date to go all electric. Mr. Toyoda won relection with 85% of the vote. The world’s largest car maker by volume of sales will build EVs hybrids and traditional vehicles as market demands, but cited the fact that the minerals it takes to make one EV can make 90 hybrids which over their lifetime reduces emissions 37 times compared to the one EV. Despite those facts countering EV absolutism, Mr Lander still voted against Mr Toyoda saying " Toyota is sending a signal of resistance to climate transition".
Actually the NYC comptroller and others with the same rationale are sending the signal they lack the competence to manage anyone's money, especially the taxpayer, as they would rather bet on a company to have a product portfolio dependent on government mandates and taxpayer funded subsidies. More so their logic on EV absolutism falls flat on environment benefits especially with the facts regarding the mineral extraction and Toyota’s findings of hybrids versus pure EVs.
Money mangers should have the fiduciary duty of investing in companies that not only make a return but also that exhibit long term viability. Unfortunately, announcements on EV or government subsidies towards them spike stocks which gives the false sense of viability or independent financial sustainability which asset mangers bet on. If auto companies keep making decisions on product portfolios based on government mandates and not the market, they will be neither viable or financially sustainable without government bailout or tax payer support. In addition it makes the industry more vulnerable to China which controls most of the worlds rare earth minerals.
America is experiencing Socialism creep not only through bigger government, but also by the supposed capitalist money managers and companies who encourage mis-allocation of capital because they depend on tax payer funded government subsidies to boost stocks short term.