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

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
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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