General Motors will tap the expertise of Korea-based LG Group to make powerful batteries for a new generation of electric cars, the automotive giant announced in Detroit on Thursday. The partnership grows from LG's work on two extended-range GM models already on the road, the Chevrolet Volt and Opel Ampera.
The company will soon release a hybrid Cadillac, and wants to expand its battery-powered offerings as cost-conscious consumers ponder their fuel-savings potential.
Watching the Pump
An April study by Deloitte found that 78 percent of U.S. consumers say they will start looking at electric cars if gas prices reach $5 a gallon. More than half said they are somewhat knowledgeable about electric vehicles, while 11 percent were extremely or very knowledgeable.
The average price of gas this week is $3.597 per gallon on the East Coast, $3.691 on the West Coast and $3.571 in the Midwest, according to the Energy Information Administration. All prices were down from the previous week.
GM said the move toward electric cars has been accelerated by more stringent emission and fuel-consumption regulations around the world. In the U.S., the Obama administration and 13 automakers agreed to increase the Corporate Average Fuel Economy for cars and light-duty trucks to 54.5 mpg by the end of 2025. Electric vehicles have no tailpipe emissions and require no gasoline.
"Many solutions for tomorrow's transportation needs may be available more quickly by building on our partnership strategy," said GM Vice Chairman Steve Girsky. "Consumers benefit by getting the latest fuel-saving technology faster if we work with the best suppliers, and we save time and money in the development process."
Added LG President and CEO Juno Cho: "This is a strategic development for LG and we fully support GM's goal to lead the industry in the electrification of the automobile."
GM said the success of the Volt and Ampera, for which LG supplied battery-pack cells, led the companies to explore other collaborations. Joint teams will work on vehicle structures and architectures for cars sold all over the world.
Last year the partners developed a demonstration fleet of Chevrolet Cruze electric vehicles used at the G20 economic summit in Seoul and now undergoing market testing.
"GM is giving an 'atta boy' to LG's strategy and road map," said Charles King, principal technology analyst at Pund-IT. "That should keep GM in the front seat so far as future LG battery developments go, and could help LG cement relationships with other vendors."
But the impact on the electric- market in general, King said, is unclear. "Right now, electric vehicles deliver acceptable performance both in speed and range for around-town driving but remain ineffective for longer trips. That will improve as the infrastructure for charging stations is built out, but better performance is probably the biggest current impediment to achieving extended range," he added. "GM's ongoing support should help boost LG's position, but it is merely one step in a long and continuing journey."
The companies didn't set a timetable for producing the new vehicles.