South Korean tech company LG and General Motors will join together to develop a new line of battery-powered cars in a very unusual pairing that looks to slash the cost and time to make electric vehicles.
The deal, which is a first-of-its-kind, pairs an automotive maker and electronics giant to design and engineer vehicles. LG will be covering half the cost of creating a future line of hybrid and electric vehicles. After that, they will become General Motors’ supplier on things that they create together.
LG Chem now supplies lithium-ion batteries for the Chevrolet Volt and Opel Ampera. The new deal will broaden LG’s role, from climate-control to on-board battery chargers. It is also possible that LG will manufacture in-vehicle entertainment systems.
General Motors hopes that its deal with LG will help it push past its competitors to develop electric and hybrid vehicles. Future demand for these vehicles is unpredictable as it depends on the prices of fuel, changing consumer trends and development costs.
“We don’t know how big this market is going to be,” said Steven Girsky, General Motors’ vice chairman. “This is a way to go at it in an efficient way that doesn’t risk the company.”
It is not surprising that LG and General Motors come together as Toyota and Ford have announced their partnership in a technology development program that aims to launch a new rear-wheel-drive hybrid car that will appear in SUVs and light-duty trucks.
Apart from the Opel Ampera and Chevrolet Volt, General Motors also has the Cadillac ELR, which relies on the Volt’s extended-range electric powertrain.