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GM's LG Electric-Car Deal Goals: Cheaper, Faster, Less Risky

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GM CEO Dan Akerson & Juno Cho, COO of LG Corp., agree to cooperate on future electric vehicles

GM CEO Dan Akerson & Juno Cho, COO of LG Corp., agree to cooperate on future electric vehicles

Enlarge Photo

General Motors has been on a roll with electric-car news of late.

It said it would build the well-received Converj concept car as the Cadillac ELR; it cut a deal with A123 Systems to buy lithium-ion cells for a future (unspecified) electric car; and, just this morning, GM announced it would jointly design and engineer electric cars with LG Group, the Korean conglomerate.

So what does this last announcement mean in practical terms? Why would the world's largest automaker partner with a Korean consumer electronics company?

We spoke this morning with GM vice-chairman Steve Girsky, joined halfway through by Micky Bly, the company's executive director of global electrical systems, infotainment, and electrification.

EDITOR'S NOTE: We've edited our interview notes into a series of questions and answers, to highlight GM's point of view on this new partnership from our three-way conversation.

GreenCarReports: What does GM see as the advantages to partnering with LG Group?

Steve Girsky: LG is a leader in consumer electronics; we're a leader in cars. We want to push the envelope on electric cars further, so we're going to share responsibility and our expertise in each of our fields. They're a nontraditional partner, and they think differently than we do.

GM CEO Dan Akerson & Juno Cho, COO of LG Corp., agree to cooperate on future electric vehicles

GM CEO Dan Akerson & Juno Cho, COO of LG Corp., agree to cooperate on future electric vehicles

Enlarge Photo

We all face constraints in resources, and we want to try to bring things to market faster--on the timeline of consumer electronics.

GCR: LG Group isn't a carmaker; does it understand the product demands on cars, the testing required?

SG: We build cars for a living; they don't. They build consumer electronics. It's a challenge: They push us to work faster, we push them to make sure they achieve automotive standards in their products.

Micky Bly: We've worked with LG Chem for three and a half years on batteries, but we've worked with LG Electronics for 10 years on modules of our Onstar system. They're one of our current suppliers. We're taking the partnership up a level, from the companies to the corporate structure.

GCR: Why does GM need this partnership?

SG: Electric cars are an emerging market. We all know how big it is; we want to be there in as many places as we can. Most people don't know the market size or predictability.

We know there will be demand, but we don't know how much, and we don't know how it'll be split among battery electric vehicles, extended-range EVs, hybrids, and the rest. We don't have the resources to play in all places. And it's a risk to us to try to do too much.

We'll have deep expertise in some places, and we'll rely on a broad array of partners in others. We want to be as efficient as possible, to offer the most products with the least resources, and to do that, we'll leverage other peoples' capabilities where we may not have those skills--all to get products to market in a faster time period.

GCR: What kinds of products will you work on together?

SG: Well, you know LG Chem provides cells for the Chevrolet Volt. So batteries is a big one. There are other electronic components as well. Their role in this new vehicle will be more significant than in the past.

Potential examples--I'm not saying these are the ones, these are just examples--include power distribution equipment, auxiliary power modules, traction motors, inverters, onboard chargers, and climate-control systems.

MB: Traditionally, camakers have mostly worked with other carmakers on jointly developed projects. And historically, GM has done a lot by itself.

These will be bigger chunks of the vehicle than we've had suppliers design in the past. We're going to be sharing a lot more than in the past.

GCR: What's the next step here?

SG:This is not an MoU (Memorandum of Understanding)! We're doing this. We've signed the papers.

After this, we'll go into radio silence, until we're ready to talk about actual products.

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Comments (19)
  1. Let's get real - GM has flopped with their self-engineered Volt and now wants help to get back into the EV ballgame.
     
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  2. So, Kent, you base your assessment that it's a "flop" on what, exactly? Eight months of sales data of a production-constrained car? Golly! That must be it then.
     
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  3. Moderation 1.01: don't feed the troll....
     
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  4. [chuckle] Tru dat. I've been testing to find out if Mr. "Beuchert" can support anything he says with actual data, or whether he merely spews bile and leaves. (I've read the TMC thread but wanted to test it myself.) But point noted. Thanks!
     
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  5. You are really ignorant if you believe that. The Volt is by far the most advance electric car in the world.
     
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  6. You must work for GM in the Twilight Zone where they are trapped.
     
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  7. No, I don't work for GM, but you must live in a cave or your mind is polluted with bias or both.
     
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  8. I like the Volt & appreciate the price point, but... why is the Volt more advanced than a Model S?

    Though one can make a case for the Volt if we count "advanced" as a euphemism for complex, in this case the added, unnecessary complexity of a range extender (an early design decision to account for GM's lack of engineering expertise/confidence with batteries?).

    ???
     
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  9. First of all, the Chevy Volt is not an EV, the Leaf is. An Ev does not have an engine (ICE) and the Volt has. Food for thought for the morons.
     
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  10. GM refers to the Volt as an extended range EV. So it might be justifiably called an EV (of sorts). To make the distinction clear, the LEAF is often referred to as a BEV (battery electric vehicle).
    John C. Briggs
     
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  11. if gm wants to stay in business, they had better choose the route of electric vehicles. of course then, they would have to figure out how to take both feet out of their mouths.

    cuz as gm has told us in the past, evs will leave us stranded in the jungle.

    i just find them laughable.
     
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  12. Your mind is polluted with bias...that's what I find laughable.
     
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  13. looks like we got another gm troll.
     
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  14. gee, john doe has plus marks, and everyone who does not like gm has minus marks !!! LOL !!!
     
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  15. You've got the wrong company. The company your talking about is Nissan and the car is a Leaf.
     
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  16. When dealing with the Japanese, traditionally American companies gets the wrong end of the stick. I wish GM would build this stuff by themselves.
     
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  17. GM is like the Tea Party...they live in fairy land and spinning around in circles with their heads in the sand. They have no idea in which direction to turn next. Their next stop, "The Twilight Zone".
     
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  18. These types of deals make all the sense in the world. Technology development takes time and a lot of money.

    Traditional supplier relationships sometimes require a guess on the supplier's side for what technology to produce. Their potential customer might be headed in a completely different direction, but because of competitiveness issues, they don't tell the supplier. This may mean that the suppliers technology never gets used and the money is wasted.

    If supplier and customer can have a more open discussion about what direction to go in, the results can often be better.

    I was amazed when I was in the disk drive business to find that we knew all the costs and profit margins of our strategic suppliers.
     
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  19. I often find myself as interested in the GCR comments as the articles. This one is a far outlying exception: by far the worst discussion I've ever read on GCR. Please leave the baseless histrionics and name calling for network "news" sites. Is it really so hard to disagree agreeably?
     
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