Sep 21

GM and SAIC agree to co-develop electric vehicles for China

 

Dismissing recent concerns for Volt-related intellectual property, yesterday GM announced a deal with its Chinese joint venture partner to co-develop electric vehicles for the “world’s largest auto market.”

GM said it and SAIC Motor Corp. will collaborate on vehicle architecture and components, and that plans have not changed to import the American-manufactured Volt which will not be eligible for over $19,000 per vehicle in potential buyer incentives.

From Shanghai, GM Vice Chairman Steve Girsky in a conference call yesterday said the U.S. and Chinese partners will develop pure electric, not range-extended vehicles like the Volt.


Happy partners.

GM said it has no plans to hand over key Volt intellectual property, and for now has no plans to build the Volt in China either.

Nor will newly developed vehicles be mere conversions of internal combustion models, Girsky said. Instead, they will be ground-up original designs. He likened yesterday’s deal to GM’s recent LG-Chem agreement, albeit this one is for China, not the rest of the world.

“We have said we will co-develop with partners new technologies that are expensive and high risk,” Girsky said Tuesday. “We will use partners where it is prudent to lower the investment cost, lower the risk, help bring the technology to market faster and, hopefully, scale the technology to bring down costs.”

As we have already noted, the auto industry trend these days is partnerships to meet world environmental challenges, and these in cases have been between companies in previously unrelated industries.

Girsky said to expect more such cases from GM.

“We are going to have a broad range of advance propulsion systems – electrics, hybrids, plug-in hybrids, extended-range vehicles,” Girsky said. “We will use different partners for different products.”

GM and SAIC have been partners for nearly a decade and a half, and plans are to develop new Battery Electric Vehicles (BEVs) at their Pan Asia Technical Automotive Center (PATAC) on a 50-50 basis.

In its press release, GM spun the news positively.

“The co-development of this new electric vehicle architecture demonstrates the broad range of benefits made possible by the strong partnership between SAIC and GM,” said Tim Lee, president of GM International Operations. “For almost 15 years, our two companies have forged some of the industry’s most successful joint ventures. This unprecedented level of cooperation is another demonstration of our companies’ commitment to work collaboratively.”

A quote from Chen Hong, president of SAIC Motor, as would be expected in a press release, agreed on the win-win nature of the dealings.

“Our agreement will enable SAIC and GM to take advantage of economies of scale and get new technology to the market faster than by going it alone,” Hong said. “It will help bring about our goal of leading the automotive industry in new energy vehicles and our vision of sustainable transportation, which we introduced at World Expo 2010 Shanghai.”

Yesterday’s agreement is a follow-up to a non-binding memorandum of understanding (MoU) on strategic cooperation signed by SAIC and GM on Nov. 3, 2010. GM and SAIC pledged at that time to reinforce collaboration in certain core areas of their business, including the development of new energy vehicles and the creation of a stronger and more integrated role for PATAC to work on future vehicles and powertrains.

Aside from this, SAIC and GM are partners in 10 joint ventures in China engaged in vehicle and powertrain manufacturing, sales and aftersales, automotive engineering and design, automotive finance and telematics, and the sale of used vehicles. The companies’ manufacturing joint ventures, Shanghai GM and SAIC-GM-Wuling, are market leaders in China. In addition, SAIC and GM operate a joint venture in India and SAIC is an investor in GM Korea Co.

This last bit regarding India, a growing economy of over one billion people, and considered by some to be the “next China” has been covered by the Truth About Cars. TTAC has said GM has been used as a “Trojan Horse” by the Chinese to enter the Indian market somewhat against the will of the Indian people. But that is another story, perhaps, for another day.

IP

Following a recent New York Times article which we documented that alleged GM was being pressured into forking over intellectual property, Michigan Sen. Carl Levin and Sen. Debbie Stabenow purportedly fired from the hip decrying a “shakedown” of American businesses.

These senators have written such letters before, and the Truth About Cars reports both were politely told their help was not wanted by GM and Ford.

We suspect somewhere in the middle the real truth about GM’s cars lies, but in light of delicate relations and lots of money to be made, GM has denied concerns that it was being pressured for Volt technology.

“Let’s get the Volt story off the table,” Girsky said. “There’s been a lot of noise around the Volt. We’ve had no requests for intellectual property from our partner SAIC or the Chinese government,” he insisted.


Prosperity anticipated for all.

GM has known all along the Volt would be subject to sales-killing Chinese tariffs and would not qualify for breaks equal to nearly half its selling price in that country, Girsky said, and GM is fine with that.

He said the hope is the Volt will later qualify for the incentives but did not explain how he thought that would happen.

Accentuating the positive, Girsky said in all its years dealing with China, there has never been pressure to divulge intellectual property.

“We’ve got 10 joint ventures with SAIC. We’ve been growing share in the market and making a lot of money because we are working with our partner SAIC to satisfy customers. This is not a political decision but a business decision,” he said of yesterday’s BEV deal.

So, although Girsky did not call the Volt a boutique product, he said plans are to sell a limited number of Volts in China as well as other markets and GM will gauge consumer reaction.

“Then we’ll see where we go from there,” he said.

Edmunds, GM.

This entry was posted on Wednesday, September 21st, 2011 at 5:55 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

COMMENTS: 35


  1. 1
    Raymondjram

    +7

     

    Vote -1 Vote +1

    Raymondjram
     Says

     

    Sep 21st, 2011 (7:36 am)

    Although I buy a few items from China once in a while (mostly LED lamps), I hope this deal will benefit our local GM market and dealers. I believe that a small BEV from GM is terribly needed for those who wish not to spend money on gas and oil, but cannot afford a Volt. I am one of those possible candidates, since I am close to retirement (working non-stop for 37 years), and my wife and I would love to buy an EV, but my income will drop.

    This BEV will also help GM leverage out the bottom level of EVs (and beat other offerings from competitors), since Tesla, Fisker and others will take up the top EV price levels, unless Cadillac’s offering becomes a big success. And the low-level EV will increase the percentage of them on the roads, and reduce oil consumption in general, which is what all EV owners want.

    So, I wish GM great success with its new directions.

    Raymond


  2. 2
    Sean

     

    Vote -1 Vote +1

    Sean
     Says

     

    Sep 21st, 2011 (7:58 am)

    Let’s hope we see more EV’S in the future and less of the stupid negative stuff on the news and I’m glad GM is trying to make things cheaper but let’s hope they don’t make there cars poor in quality I’m somewhat concern because when China makes products for us I’ve heard that they don’t last as long and there quality is not always great but not always true sometimes there are good Chinese made products out there you just gotta know what your buying before you want it and I hope our cars won’t be unreliable, unsafe and doesn’t last as long let’s just hope that does not happen to GMC and Chevrolet vehicles in the future?


  3. 3
    Roy_H

    +4

     

    Vote -1 Vote +1

    Roy_H
     Says

     

    Sep 21st, 2011 (8:12 am)

    So glad to see this issue of Volt (and other) intellectual rights being clarified. GM is doing the right thing, in that they are keeping their IP and sacrificing the lucrative Chinese government incentives. It is also very re-assuring to read that GM has never been pressured to divulge intellectual property. This whole issue was a red herring to begin with.


  4. 4
    kdawg

     

    Vote -1 Vote +1

    kdawg
     Says

     

    Sep 21st, 2011 (8:39 am)

    So in the US, will we see a BEV from GM (made in China) in 2015?


  5. 5
    kdawg

    +3

     

    Vote -1 Vote +1

    kdawg
     Says

     

    Sep 21st, 2011 (8:43 am)

    “over $19,000 per vehicle in potential buyer incentives”
    ———–

    It seems like you could make a small,cheap, Chinese BEV, with no safety features, and no bells & whistles, for $19,000, thus making this a free car.


  6. 6
    Roy_H

     

    Vote -1 Vote +1

    Roy_H
     Says

     

    Sep 21st, 2011 (8:51 am)

    kdawg:
    “over $19,000 per vehicle in potential buyer incentives”
    ———–

    It seems like you could make a small,cheap, Chinese BEV, with no safety features, and no bells & whistles, for $19,000, thus making this a free car.

    I think the key word here is “potential”.


  7. 7
    Roy_H

     

    Vote -1 Vote +1

    Roy_H
     Says

     

    Sep 21st, 2011 (8:57 am)

    kdawg,

    I hope we will see a BEV version of the Volt soon.
    And of course other models like a voltec SUV. When the Converji was cancelled, the Cadillac people said that the Voltec drive train didn’t have enough performance for the Cadillac image, I wonder if the ELR has a more powerful electric motor (also required for SUV version).


  8. 8
    Roy_H

     

    Vote -1 Vote +1

    Roy_H
     Says

     

    Sep 21st, 2011 (9:09 am)

    Jeff,

    There was an article about the Compact Power Inc. battery plant in Holland Michigan being ready for production in January 2013 (moved up by 3 months). I thought the original schedule was March 2012. Could you clarify this?


  9. 9
    Tall Pete

    +3

     

    Vote -1 Vote +1

    Tall Pete
     Says

     

    Sep 21st, 2011 (9:46 am)

    From the article :

    GM said it has no plans to hand over key Volt intellectual property, and for now has no plans to build the Volt in China either.

    Best news of the article. Let’s hope GM stick to their guns on this one. Too much at stake in the long term here.


  10. 10
    Tall Pete

    +3

     

    Vote -1 Vote +1

    Tall Pete
     Says

     

    Sep 21st, 2011 (9:52 am)

    Roy_H: I hope we will see a BEV version of the Volt soon.

    I think it’s too soon. They better wait for the batteries to improve a lot (capacity way up, prices down) before entering that segment. For now, in NA, the Volt is clearly the way to go.

    I test drove a Leaf last week. Sweet ride. Lots of torque. Too expensive (40K$+ in Canada). Volt is a much better choice. It won more awards, lol.


  11. 11
    ccombs

    +5

     

    Vote -1 Vote +1

    ccombs
     Says

     

    Sep 21st, 2011 (10:05 am)

    This was a smart move- GM gets access to China but doesn’t have to hand over any of it’s really innovative Volt-related technology. Phew.


  12. 12
    George S. Bower

     

    Vote -1 Vote +1

    George S. Bower
     Says

     

    Sep 21st, 2011 (10:31 am)

    I think KDAWG should do a rendering of what this small, inexpensive EV would look like.


  13. 13
    DonC

    +2

     

    Vote -1 Vote +1

    DonC
     Says

     

    Sep 21st, 2011 (11:01 am)

    Lots more to be learned about this story. First you have China clearly breaking the WTO rules for, I don’t know, the 3456 time. Then you have the American taxpayers who bailed out GM and aren’t in any mood to have some other country shake GM down for its technology. The US Trade Representative announced more legal action yesterday. We’ll see if this has any effect on the Chinese. Someone I doubt it.

    As for the very generous rebate program, the China market is of course incredibly screwed up. First the government encouraged car manufacture. Now the government has decided there are too many cars making too much pollution and congestion. What to do? Of course the answer is to cut down on the number of cars, so you have to get permit to register one. Naturally there aren’t many slots in the big cities. So guess what? Ba ha ha ha ha ha ha! The reality is that if you’re going to formally regulate a market by restricting entry then you are forever going to have one heck of a mess on your hands.


  14. 14
    kdawg

    +1

     

    Vote -1 Vote +1

    kdawg
     Says

     

    Sep 21st, 2011 (11:02 am)

    Roy_H: I hope we will see a BEV version of the Volt soon.

    If GM does it (for the US), I hope it looks very different from the Volt. I think GM will continue to test the BEV market in other countries first before bringing anything to the US. I wouldn’t expect anything till after 2012 (IMO). If for some crazy reason the Leaf and Focus electric take off, then GM would probably accelerate their schedule.


  15. 15
    Raymondjram

    +3

     

    Vote -1 Vote +1

    Raymondjram
     Says

     

    Sep 21st, 2011 (11:07 am)

    Then if GM wants to produce a small BEV, they can use the Sonic platform to develop it. I understood that their Indian partner is doing just that now.

    Raymond


  16. 16
    BLIND GUY

     

    Vote -1 Vote +1

    BLIND GUY
     Says

     

    Sep 21st, 2011 (11:11 am)

    Partnering-up; certainly seems to be the trend with companies looking to share the development costs and market-share of innovative products. I certainly see how this joint-venture might help GM grow as a whole and certainly how it benefits China. I am not so sure how this will affect American blue-collar workers? I also wonder how this “sharing” will translate in the quality of a final product such as a BEV made in China for sale in the U.S.? Would GM build BEVs here instead or will we have to buy a BEV made in China if we want a “GM BEV”? I do like the fact that the BEV will be designed from the ground up instead of just a conversion of an existing vehicle.


  17. 17
    Jeff Cobb

     

    Vote -1 Vote +1

    Jeff Cobb
     Says

     

    Sep 21st, 2011 (11:48 am)

    kdawg:
    So in the US, will we see a BEV from GM (made in China) in 2015?

    I see nothing to indicate these vehicles are any more than for the domestic Chinese market, and maybe nearby export. The LG-Chem deal was likened to the Chinese deal, and that is a hint where some BEVs will come from. Girsky said expect more deals on advanced-tech propulsion. I’ll see if I can find out more.


  18. 18
    Jackson

     

    Vote -1 Vote +1

    Jackson
     Says

     

    Sep 21st, 2011 (11:48 am)

    I agree with those who say that a GM BEV should deliberately be a different model/style from the Volt. A BEV Volt would muddy the EREV message by making it’s inherent limitations share the same name. Use “Volt” or “Volt-X” for Voltec vehicles only, please.

    Also, any near-term BEV will likely be a much smaller vehicle due to economic factors (mainly the cost of batteries), and GM’s would likely be built on a different chassis.

    I like the idea of a BEV Sonic, but I’d like a PHEV or E-assist version even more. I realize that there are diminishing returns for gasoline efficiency the smaller the vehicle, but I believe the psychological effects could be surprising (Prius beater, anyone?). It could also bolster the PHEV or E-assist system for larger vehicles: “Own the same drive as the Eco Sonic in your SUV!”


  19. 19
    Bonaire

    +1

     

    Vote -1 Vote +1

    Bonaire
     Says

     

    Sep 21st, 2011 (1:08 pm)

    One primary import company we have here that is not yet throwing weight around in the EV market is Hyundai. They have a large audience of Kia and Hyundai owners here and if they can do a model of say the Optima or Elantra with EREV capacity with a cost of say $33K before incentives, you will see more market growth. An Elantra Touring (wagon-style) would be fantastic as an EREV. I’m holding out for American made and am shooting for a Volt (just started powering up a GM Card with a lot of my bills and plan to use for business travel).

    They have LG in Korea now and we know Korea makes good Lithium products. A Hyundai with lower “IP” in it (less computer software and management stuff) might have a deep discount against the current costs of a Volt or the forthcoming Fisker Nina EREV.

    No Plug + No Genset = No Sale
    No PlugGen = No Sale


  20. 20
    kdawg

    +1

     

    Vote -1 Vote +1

    kdawg
     Says

     

    Sep 21st, 2011 (3:10 pm)

    George S. Bower: I think KDAWG should do a rendering of what this small, inexpensive EV would look like.

    Here’s the one GM was developing with REVA in India before they ended their partnership last year.

    reva-nxg.jpg

    http://www.smartmotorist.com/motorist-news/gm-india-and-reva-announce-a-partnership-to-develop-electric-cars.html

    But I would imagine something like the Spark is what they come up with.

    480-spark.jpg


  21. 21
    kdawg

     

    Vote -1 Vote +1

    kdawg
     Says

     

    Sep 21st, 2011 (3:20 pm)

    Bonaire: One primary import company we have here that is not yet throwing weight around in the EV market is Hyundai.

    Hyundai had the Blueon in Korea, but I dont think they are doing much with it.

    http://www.autoblog.com/2010/09/09/hyundai-blueon-electric-vehicle-unveiled-in-south-korea/

    They also started selling the hybrid Sonata this year. So it looks like baby steps for them. They will most likely continue to be followers (with cheap versions) vs. leaders.

    Regarding Kia:
    ————–
    A Kia Motors spokesman said the company plans to roll out an A-segment all-electric car in South Korea but not overseas.

    Kia’s upcoming electric car, codenamed TAM, can run 160 kilometers (100 miles) on a single charge and has maximum speed of 130 kilometers per hour (80.8 miles per hour),


  22. 22
    Streetlight

    +1

     

    Vote -1 Vote +1

    Streetlight
     Says

     

    Sep 21st, 2011 (4:09 pm)

    Yesterday’s story line “GM deal moves electric car development to China — a ‘shakedown’?” USA Today 20 Sept 11 is a whole lot different from today’s Edmond’s article featured here. (My postings per ‘MSNBC Business’ yesterday still apply.)

    A more pronounced combine to develop pure EV for China is not the same as “Moving GM’s EV R&D to China.” That is, taking board member quotes at face value.

    While having a GM board meeting in Shanghai seems innocuous enough, given the immediate confluence of labor agreements and Wall Street volatility underscored by intense political and international acrimony-the timing appears stagecraft.

    Its true China’s rare Earth’s embargo is lost in the noise of all the foregoing.

    GM needs to further clarify. VOLT’s IP is valuable today. As we all know, competition forces constant upgrading. So what’s valuable today has no bearing on value next year.
    If the move was made to foster China offsetting its enormous trade imbalance which made China our banker … fine. That is, if and only if China’s a trustworthy partner. If not, and this is the gist of the USA article….then the combine is in every respect a “shakedown”. The point being this: China must lift its rare Earth’s embargo. Immediately.


  23. 23
    Jackson

     

    Vote -1 Vote +1

    Jackson
     Says

     

    Sep 21st, 2011 (4:39 pm)

    BS EV reporting creates a tempest in a teapot? Inconceivable! :-P


  24. 24
    kdawg

    +1

     

    Vote -1 Vote +1

    kdawg
     Says

     

    Sep 21st, 2011 (4:41 pm)

    Streetlight: The point being this: China must lift its rare Earth’s embargo. Immediately.

    Or the US can enforce an embargo of our own on:

    Corn, tobacco, cotton, scrap metal, copper, gold/platinum, and all the machinery China buys from us.

    I don’t know if we’d win the embargo-off, but it would be interesting for sure.


  25. 25
    ChavinMiNuttz

    -11

     

    Vote -1 Vote +1

    ChavinMiNuttz
     Says

     

    Sep 21st, 2011 (5:50 pm)

    (click to show comment)


  26. 26
    Jeff Cobb

    +3

     

    Vote -1 Vote +1

    Jeff Cobb
     Says

     

    Sep 21st, 2011 (7:50 pm)

    Following up here on my earlier comment – GM’s China spokesperson, Dayna Hart just answered about whether these vehicles will make it to the U.S. –

    “At this time, there are no plans to export vehicles from China to the United States,” she said. “Vehicles resulting from the partnership between GM and SAIC will be sold in China under SGM and SAIC brands. SAIC will use the architecture to build EV vehicles across the globe.”


  27. 27
    Eco_Turbo

    +1

     

    Vote -1 Vote +1

    Eco_Turbo
     Says

     

    Sep 21st, 2011 (8:15 pm)

    ChavinMiNuttz: You’re volt has an Austrian engine, Korean battery cells and electric motors from japan!

    So where’s the car you drive made?


  28. 28
    Roy_H

    +2

     

    Vote -1 Vote +1

    Roy_H
     Says

     

    Sep 21st, 2011 (9:09 pm)

    ChavinMiNuttz: You’re volt has an Austrian engine, Korean battery cells and electric motors from japan!

    That is changing, as all parts will be manufactured in USA in about 1 year.


  29. 29
    HaroldC

    +1

     

    Vote -1 Vote +1

    HaroldC
     Says

     

    Sep 21st, 2011 (9:55 pm)

    ChavinMiNuttz,

    you forgot the transmission made in japan……but what what do you drive ?…..if you are old enough to drive ?
    but Roy_H , l think you are right….soon most parts will be made here
    just wish the volt cost less…….and was more available


  30. 30
    kdawg

     

    Vote -1 Vote +1

    kdawg
     Says

     

    Sep 21st, 2011 (10:19 pm)

    Jeff Cobb: At this time

    ….I wish I had a better crystal ball. I guess the next question would be; “will technology developed by the SAIC/GM partnership be used in US BEV’s?”


  31. 31
    kdawg

    +1

     

    Vote -1 Vote +1

    kdawg
     Says

     

    Sep 21st, 2011 (10:25 pm)

    FINALLY… GM’s response to the Leaf ad poking fun at the guy filling up the Volt at the gas station. I like the way GM embraced the fact the Volt uses gas, and took the high road here. They could have shown a leaf stranded on the side of the road.

    For those that haven’t seen the new ad.
    http://www.youtube.com/watch?v=eDyZu6zOC6Y&feature=player_embedded
    and
    http://www.youtube.com/watch?NR=1&v=-nQbsrQXA7s


  32. 32
    Jeff Cobb

    +1

     

    Vote -1 Vote +1

    Jeff Cobb
     Says

     

    Sep 21st, 2011 (10:53 pm)

    kdawg,

    This is good. It does not take any shots at the Leaf in the way that Nissan tried (weakly) to do to Chevrolet, but it makes some very strong points.

    Now, a heads up – To any Volt drivers on or near the West Coast wanting to show support for the Volt. You will be given your chance tomorrow … :)

    Then again, anyone anywhere will be offered opportunity, personally, by a Hollywood actress no less …


  33. 33
    Jackson

    +1

     

    Vote -1 Vote +1

    Jackson
     Says

     

    Sep 21st, 2011 (10:55 pm)

    ChavinMiNuttz,

    Well well, if it isn’t the McCrotch guy. How are things hangin? On second thought, never mind.

    Haven’t missed you at all, BTW.

    Don’t make it so short, next time.

    … there’s no troll like an old troll …


  34. 34
    Jackson

     

    Vote -1 Vote +1

    Jackson
     Says

     

    Sep 21st, 2011 (11:06 pm)

    I recognize ChavinMiNuttz as a long-ago troll, and tried to finger him; but he was so egregious that even Lyle put in code which flags any comment containing his original name (perhaps Jeff has released the comment by now).

    Don’t bother replying to him, he’s just here to stir the anthill.


  35. 35
    Jeff Cobb

    +4

     

    Vote -1 Vote +1

    Jeff Cobb
     Says

     

    Sep 21st, 2011 (11:16 pm)

    Jackson,

    My friend Jackson,

    I recognize this guy by any name. Saw him when he posted. His name in all its variations sounds borderline obscene, and that bugs me right there, but I’ll let him pass this time. I have no problem banning anyone who crosses a line however. I can ban his name, IP address, everything.

    But as long as he (or any other troll) does not cross a line, I will let them post.

    You have no worries.