GM turns over Bolt design work to LG Corp while dissing BEV’s in new advert

General Motors and LG Corp announced today what they describe as an “unprecedented supplier relationship” in which LG Electronics Vehicle Components will supply most of the components of the Chevy Bolt.  Car companies like GM tend to proudly manufacture the majority of car components in their own factories.

Indeed, while GM turned to LG Chem to make battery cells for the Chevy Volt back in 2011, GM manufactured battery packs from those cells in their own factory.  Back in the 2010-2011 time frame GM’s press releases explained it was the duty of a major car manufacturer such as GM to develop competence in such critical technology.

Therefore it’s puzzling why GM would turn to LG Corp (the parent of LG Chem) to manufacture this list of components:

  • Electric Drive Motor (built from GM design)
  • Power Invertor Module (converts DC power to AC for the drive unit)
  • On Board Charger
  • Electric Climate Control System Compressor
  • Battery Cells and Pack
  • High Power Distribution Module (manages the flow of high voltage to various components)
  • Battery Heater
  • Accessory Power Module (maintains low-voltage power delivery to accessories)
  • Power Line Communication Module (manages communication between vehicle and a DC charging station)
  • Instrument Cluster
  • Infotainment System

What’s left?  Well, there’s the assembly of the finished car, and things like seats and wheels or doors or other mechanical components.  Is that all GM can manage to do is to make mechanical stuff?

Maybe I’m being a little harsh on GM.  There are quite a few more components left to GM to design/build, most of which are the mechanical components.  But, they’re turning to LG to make the battery pack when they proudly insisted on making their own pack for the Volt?  And, for that matter, Nissan makes their own pack, as does Tesla Motors, and probably some other companies.  GM can’t design and manufacture an inverter, or infotainment system, or instrument cluster, etc etc?   We are talking about General Motors, aren’t we?  Supposedly one of the mightiest companies in the world, right?

At the risk of sounding harsh again, let me say this somewhat reinforces the theory I’m developing that General Motors has lost interest in electric vehicles.  The last couple years Volt marketing has been lackluster, for example.

The GM, LG Corp, partnership

Here’s what GM wants us to believe:

“Chevrolet needs to be disruptive in order to maintain our leadership position in electrification,” said Mark Reuss, GM executive vice president of Global Product Development, Purchasing and Supply Chain. “By taking the best of our in-house engineering prowess established with the Chevrolet Volt and Spark EV, and combining the experience of the LG Group, we’re able to transform the concept of the industry’s first long range, affordable EV into reality.”

And this:

GM’s component strategy is centered on three options: build, buy and partner. Where it makes economic and strategic sense, GM will build some of its own components. Others will be purchased directly from suppliers with the most expertise in a particular discipline. And, as in the case of LG, GM will partner with a supplier to leverage its own engineering with the supplier to develop unique strategic systems and components.

LG Electronics Vehicle Components led a team of LG companies, including LG Chem, LG Innotek, LG Display and LG Electronics, to help develop the Bolt EV. LG Electronics has invested more than $250 million in an engineering and manufacturing facility in Incheon, Korea, to support the component development and manufacturing for Bolt EV components.  GM and LG have a history dating back to 2007 when LG started supplying components used in GM’s OnStar system.

Of course all automakers follow forms of the strategy named above, to choose between building stuff in-house, or some kind of external supply arrangement.  As I said, I’m probably being too harsh, but this is astonishing given GM’s past statements.

Pressure to share cost between carmakers

Reuters reports that GM has had to face down pressure from Fiat/Chrysler Chief Executive Sergio Marchionne on partnering up on electric vehicle technology in order to drive down costs.  Marchionne’s theory is that if the automakers cooperate, the R&D costs are shared and everyone will benefit.  In essence that’s what GM has done, but with LG Corp rather than Fiat.  We could interpret this as a slap in Fiat’s face?

GM hoping to derail Tesla’s expansion

One of the big questions around the Chevy Bolt is the target production volume.  Supposedly GM plans to use the Bolt as a weapon to prevent Tesla Motors from having success with the Tesla Model 3.  Since Tesla Motors plans 100,000+ production volume, shouldn’t GM produce the Bolt in similar volume?  If so, where is GM’s plan for a Gigafactory?  Tesla Motors had to build the Gigafactory to have a chance of 100,000+ cars/year, and therefore so too would GM need similar battery manufacturing capacity to do so.

An alternate theory, then, is that GM has turned to LG Corp for volume manufacturing of electronic and battery components.

Surprisingly low Bolt production volume

On the other hand, the Detroit News reports that GM plans a paltry 20-30,000 volume for the Bolt.   That is not US-only production, but for worldwide sales of the Bolt.  This isn’t going to put a dent in Tesla’s plans.

GM is claiming battery pack cost for the Bolt will be $145/kiloWatt-hour.  That’s in the ballpark necessary to support the $37,500 MSRP ($30k price after tax breaks) projected price – and is in the ballpark analysts have for years said would be the tipping point where electric cars simply make more sense than gasser cars.

If GM is able to follow through with these two price points – why target such a low production volume?  That’s barely more than the Volt production volume, and the Bolt should be a much more attractive car – 200 miles range, fast charging, electric car, what’s not to like?

GM, the company who’s told us to be afraid of range anxiety since 2010

Oh, wait, this is GM, the company that crushed the EV1 and has been telling us to be afraid of range anxiety since launching the Volt.  GM’s repeated message has been battery EV drivers will get stuck on the side of the road, be afraid, be very afraid.  Back in 2010 GM really did trademark “range anxiety”.  At around the same time I wrote a couple articles asking whether Fear, Sex or Tombstones would sell electric cars.  The “fear” story came from GM, who has wanted us to be afraid of running out of electricity since 2010, the Sex story came from Fisker Automotive draping scantily clad women across the Fisker Karma, and the Tombstone story came from Coda Automotive and one of its marketing stunts.

About 2 weeks ago GM released a video on YouTube reinforcing the you’ll be “stuck” meme if you buy an electric vehicle.   That is, the only way to not get stuck is to keep relying on gasoline in order to avoid range anxiety.

I’m definitely ending this post thinking that GM wants to downplay EV’s and is hoping they go away.

 

About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.

About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.

2 Comments

  1. Pingback: GM following in Ford’s footsteps?? | spare electrons

  2. Pingback: GM’s “range extended EV” fallacy — fast charging is also a range extender | The Long Tail Pipe

Leave a Reply