General Motors, LG partnership on Chevrolet Bolt may be roadmap for future deals

21 Oct 2015 | Author: | No comments yet »

GM credits LG Chem with creating much of the Chevy Bolt.

General Motors Co on Tuesday outlined a wide-ranging partnership with Korean electronics firm LG Corp for production of the 2017 Chevrolet Bolt electric car that could establish a blueprint for such collaborations in the future. General Motors’ entry into the long-range electric vehicle market should be able to go more than 200 miles — or 320 kilometres — on a single charge, company officials said Tuesday. Several LG subsidiaries, including LG Electronics and LG Chem, have worked closely with GM to develop electric motors, battery cells, dashboard displays and other electronic systems for the Bolt, which goes into production late next year in Michigan. Historically automakers’ purchasing departments were the crowbar through which GM, Ford and Chrysler pried billions in savings from suppliers by cutting their prices and squeezing their profit margins. The two companies are highlighting their partnership at a time when GM is under pressure from Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne to explore an alliance to spread the costs of developing electric vehicles and other new technology.

LG Chem is the South Korean electronics company that supplied the batteries for the first and second generation of the Chevrolet Volt, producing them at a plant in Holland, Mich. The comments were made at an event at GM’s technical centre north of Detroit announcing joint development efforts with LG Electronics of Korea to design the Bolt’s electric motor, heating and air conditioning system, infotainment screen and other components.

GM Chief Executive Officer Mary Barra has rebuffed Fiat Chrysler, saying GM can improve economies of scale and advance new technology strategies in other ways. While the Volt is an extended range plug-in backed up by a small gasoline engine, the Bolt will be a pure electric vehicle with a range of at least 200 miles. The GM-LG partnership is one of the most extensive yet between a U.S. automaker and an overseas supplier, and will shift more of the development and production cost for the new Chevrolet to a partner with considerable technical expertise. Alternative powertrain vehicles, whether gasoline-electric or plug-in hybrids or battery-only, are facing harsh headwinds in the U.S. market and low gas prices and Americans’ insatiable appetite for towing capacity and cargo space is fueling demand for pickup trucks, large SUVs and crossovers. While GM and others have made progress in boosting the range of their batteries and reducing weight of vehicles, the cost of producing hybrids and EVs at current sales volumes is a high hurdle.

Reuss said the partnership with LG Chem and LG electronics enabled GM to overcome range, price and utility limitations that have hampered mainstream electric car sales in the past. The supply agreement is a coup for LG Electronics, which is trying to boost its auto business amid growing headwinds for its television and smartphone businesses.

Bolt pricing will be released closer to the car’s launch, but Chevrolet has said it intends to sell it for about $30,000 after buyers apply federal and state tax credits. Pam Fletcher, GM’s executive chief engineer for electric vehicles, said the company will try to get the Bolt classified as an SUV because it has the “spaciousness and utility” of a larger vehicle. The broad range of products being supplied to GM could enhance LG Electronics’ auto business, which recently won contracts to supply information displays to Honda Motor Co and Volkswagen AG’s Porsche. Apple Inc has talked with German automaker BMW AG about collaborating on an Apple-designed electric car, and Google said it is talking to vehicle manufacturers about partnering on a self-driving car.

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