In a break with the past, General Motors acknowledged Friday that South Korean electronics company LG Chem not only supplied batteries for the 2017 Chevrolet Bolt, but also co-developed the electric car’s climate controls, electric-drive motor, power electronics, dashboard displays and infotainment system.
“This is something we haven’t done this way before, but the capability of LG Chem and other suppliers changes over time,” said Mark Reuss, GM executive vice president for global product development, purchasing and supply chain.
“Not that long ago, automakers had an adversarial relationship with their suppliers, behaving more like dictators than customers,” Reuss said.
Historically, an automaker’s purchasing department was the crowbar with which GM, Ford and Chrysler pried billions in savings from suppliers by cutting their prices and squeezing their profit margins.
“What we found out was, that behavior just blows up in your face,” Reuss said. “It’s an unworkable and unsustainable model.”
LG Chem supplied the batteries for the first and second generation of the Chevrolet Volt, producing them at a plant in Holland, Mich.
While the Volt is an extended-range plug-in backed up by a small gasoline engine, the Bolt will be a pure electric vehicle with a range of at least 200 miles. Alternative powertrain vehicles, whether gasoline-electric or plug-in hybrids, or battery-only, are facing harsh headwinds in the U.S. market as low gas prices and Americans’ insatiable appetite for towing capacity and cargo space is fueling demand for pickup trucks, large SUVs and crossovers.
While GM and others have made progress in boosting the range of their batteries and reducing weight of vehicles, the cost of producing hybrids and EVs at current sales volumes is a high hurdle.
That is a significant factor in GM’s decision to entrust LG Chem with more responsibility on the Bolt that will go into production in late 2016. The company has developed 11 new components for the car.
Reuss and Pam Fletcher, GM executive chief engineer for electrified vehicles, said they are confident the Bolt will be certified for a range of at least 200 miles by the time it goes on sale. A test fleet of about 100 Bolts have been driven for weeks.
“We’ve actually been driving the cars, so we have data and we feel good about it,” Reuss said.