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GM, LG Enter Electric Car Pool Lane

Stocks in this article: GM

By Ucilia Wang, GigaOM

The team approach is becoming popular in the electric car development space. General Motors and LG Group announced Thursday a plan to co-develop electric vehicles in order to speed up their deployment.

The two companies already have worked together in the electric vehilce market. GM is using LG’s lithium-ion battery cells for its plug-in electric hybrid Chevy Volt, which was launched only late last year. The new partnership will see LG engineers working on component, structural and architectural designs, the companies said.

LG is a big conglomerate better known for its consumer electronics and appliances, and GM is interested in using some of its expertise in areas such as air conditioning, heat exchanger and motor designs, said Micky Bly, executive director of GM’s electrical systems, hybrids, electric vehicles and batteries. GM already uses hardware produced by LG for its OnStar system.

Exactly what technologies LG will bring to the co-developed cars is not so clear. Bly mentioned during a press conference that LG also has expertise in charging and power conversion systems, but he was coy about specifying what parts of a vehicle will use LG’s technologies. LG has a business unit that for many years has worked on “vehicle integration and development,” Bly noted. LG worked with GM on a demonstration fleet of electric Chevy Cruze in Korea last year. The Cruze used LG’s battery pack and inverter.

Bly declined to talk about the cost or time line for launching the first co-developed car.

The electric car market is barely there, and carmakers from startups to industry giants have announced plans to roll out new models in the next few years. Ford plans to launch Focus Electric later this year and has stepped up its marketing campaign. Ford recently announced a deal to sell its customers a solar electric system from SunPower at a reduced price.

It will take more than clever marketing to sell electric cars though. Lowering the price of electric car will help tremendously since none of the electric passenger cars, whether they are all-electric or plug-in models, are as affordable as their gasoline counterparts. The Volt starts at $40,280 while the Nissan LEAF costs $35,200. Tesla Motors has indicated that its Model S, which is supposed to be appeal to a larger crowd than its Roadster can, will cost nearly $80,000.

Ford hasn’t announced the price for the Focus Electric.

Buddying up to competitors to co-develop vehicles could reduce development time and costs. That’s the thinking behind GM’s LG partnership, and GM isn’t alone. Toyota has been working with Tesla on an electric RAV 4, and Teslaa scored a $100 million supply deal this year. Tesla will provide the power train system, which includes a battery, a charging system, an inverter, a motor, a gearbox and software. A RAV4 with the Tesla powertrain is scheduled for launch in the United States next year.

Daimler and Renault-Nissan Alliance last year announced a pact to co-develop technologies for electric cars and to jointly work on Daimler’s Smart Fortwo and Renault’s Twingo.

Carmakers are under pressure to deliver more fuel-efficient and less-polluting cars in light of the new federal rule that requires cars sold by 2025 to have an average fuel economy of 54.5 miles per gallon.

Image courtesy of General Motors

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