Road toward the future

LG, GM to collaborate on next-generation electric vehicles

By Kim Yoo-chul

LG Group has teamed up with General Motors to develop an extensive range of battery-powered electric vehicles in what the companies describe as a landmark move.

The Korean technology giant has been desperate for a slice of the growing world market for electric cars as it looks increasingly like its corporate fate may hinge on batteries, as it continues to struggle in its main markets for consumer electronics and mobile phones.

The agreement signed at GM’s headquarters in Detroit aims to combine LG’s expertise in car battery technology with the American automaker’s strength in eco-friendly next-generation vehicles. LG officials emphasized that it goes ``beyond just battery cells.’’

``The deal covers an expansive range of technologies and parts and the level of cooperation between LG and GM promised in the agreement is unprecedented in this industry,’’ said LG spokeswoman Kim Min-jeong, Friday.

Kim declined to unveil further details of the partnership, such as the types of vehicles to be co-developed and when they would be hitting the roads, or whether the two companies would be swapping any equities under the collaborative framework.

Other industry sources say that LG will likely cover around half the costs of creating the new electric and hybrid vehicles and work as GM’s supplier on any product or part that the companies create together.

Involved in the project with GM is LG Chem, LG’s chemical and rechargeable battery unit, LG Innotek, a developer of technology components, and LG Electronics, the group’s electronics unit.

The LG group of companies will handle battery technologies and platforms, climate control systems, inverters, and possibly in-vehicle entertainment systems.

The agreement also allows LG to market the products and technologies jointly developed with GM to other companies, which will allow the firm to find further clients in the global automotives industry.

``The strategic alliance has just been evolved from the two firms’ work on the all-electric Chevy Volt and the Opel Ampera for Europe,’’ said Jung Jeong-wook, another LG official.

LG Chem has been supplying battery packs for GM’s Chevy Volt lines. LG also offered batteries and propulsion systems for a demonstration fleet of electric Chevy Cruze sedans in Seoul.

``Many solutions for tomorrow’s transportation needs may be available more quickly by building on our partnership strategy,’’ GM Vice Chairman Steven Girsky said in a statement.

The GM-LG partnership is the second high-profile collaboration announced this week, according to LG officials.

Ford and Toyota signed a memorandum of understanding (MOU) that will see the two auto companies team up to develop new hybrid technology for light trucks and sports utility vehicles (SUVs).

Automakers doing business in the U.S. have been put under more pressure by the Obama administration to advance fuel efficient technologies after an agreement to raise the corporate average fuel economy (CAFE) standards.