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GM CTO says company accelerating electric vehicle development in China; R&D focus on batteries and lightweight materials

General Motors is accelerating the development of electrified vehicles in China, Jon Lauckner, GM Chief Technology Officer, vice president of Global Research & Development, and president of GM Ventures, said in a presentation at the FISITA 2012 World Automotive Congress in Beijing.

In September 2011, GM China opened the Advanced Materials Lab in Shanghai. The facility, which is part of the GM China Advanced Technical Center, is engaged in research on battery technology and lightweight materials.

China has made electrification a key strategy. Electrified vehicles will play a critical role in efforts to conserve and ultimately displace petroleum as the major source of transportation energy.

We will apply innovative technologies to cell design and fabrication, test and validate advanced cell materials provided by suppliers, and ultimately integrate battery cells into future battery systems for our vehicles. We believe the further development of lithium-ion battery technology is possible through improvements in cell chemistry, cell and pack design, and optimization of thermal management.

—Jon Lauckner

GM’s goal is to improve the energy density of its batteries so that they are smaller, lighter and less costly than today’s batteries. In the long term, the automaker believes there is potential to double the energy density of battery packs in electric vehicles.

GM’s global strategy is to provide consumers a variety of choices through a range of vehicles with electrified powertrains. Its strategy includes:

  • Mild hybrid technology such as the eAssist system, which can improve fuel efficiency in anything from small cars to full-size cars and luxury sedans.

  • Full hybrid technology such as the 2-mode hybrid system on full-size trucks and SUVs.

  • Extended-range electric vehicles, which offer electric propulsion and contain an on-board engine generator to extend the vehicles’ range.

  • Pure electric vehicles, which run on full electric propulsion.

GM has brought to the China market the Chevrolet Volt extended-range electric vehicle, Buick LaCrosse with eAssist and Cadillac Escalade Hybrid. On 22 November at Auto Guangzhou 2012, Shanghai GM introduced the SAIL SPRINGO pure electric vehicle, which will be built and sold in China. (Earlier post.)

According to Lauckner, one other important area where GM is applying electrification and connected vehicle technology is on urban mobility solutions. GM has showcased in China its vision for sustainable urban transportation through products such as the EN-V (Electric Networked-Vehicle) concept, which introduced the world to a new automobile DNA based on electrification and connectivity. The concept was a focal point of the SAIC-GM Pavilion at Expo 2010 in Shanghai.

Earlier this year, GM signed a memorandum of understanding with the Sino-Singapore Tianjin Eco-City Investment and Development Co. Ltd. and the Tianjin Eco-City Administrative Committee to collaborate on assessing the real-world application of GM’s EN-V 2.0 concept in the Tianjin Eco-City.

Comments

HarveyD

Another good move by New GM to transfer R & D and production facilities where wages are lower and future markets will be to maximize profits.

LanceK

Such a shame that American tax payers bailed out GM, and that GM cannot have these jobs in America, instead exports them to China which in turn give's China the technology. What about all the small businesses of America that support this when its built in America.
What is the reason for the loss of American Jobs.
$$$$$$$$$ Unions $$$$$$$$$$$$$$$$$$$$$???
This really sucks.

HarveyD

Lan...maximizing profits 'at all cost' has been closely related to USA's foundation and ways for a very long time. Moving major production facilities to China, India, Brazil, Mexico, Canada etc is nothing new.

Moving R & D and effectively producing for growing local markets is new and will gain speed in China, India, Brazil etc as economy progressively moves from US and EU to those large countries with higher population and larger local markets.

This move will take place for the following 50+ years. US and EU will have to find ways to keep enough local R & D and manufacturing facilities to create jobs and lower unemployment to 5% or less. It is going to be a challenging job for our politicians and enterprises.

sd

A few facts although not everyone on this site is necessarily interested in the facts.

1. GM does business in more than 120 countries.

2. Roughly 70 percent of GM sales are generated outside of the United States; in most cases, those vehicles are not exported from the U.S.

3. GM imports no vehicles from China to the U.S. Every Chevrolet sold in the U.S., with the exception of the Spark, is built in North America.

4. Chevy Volt, Buick Enclave and Cadillac SRX, CTS and Escalade are exported from North America to China.

5. GM did not use U.S. government bailout money to build manufacturing footprint in China; since bankruptcy, GM has announced investments at 30 U.S. facilities totaling more than $7.1 billion, which created or retained 18,641 jobs.

6. In 2011, GM exported more than 275,000 vehicles from the United States.

Note that I have no interest in GM other than I own several GM vehicles and have 200 shares of GM stock which is a relatively minor part of my investment.

Also, this fall I attended IMTS (International Manufacturing Technology Show) in Chicago where I learned a new word -- reshoring. Yes, some of the higher tech manufacturing is moving back to the US. Also this was the largest show in their history. I also attended FabTech in Las Vegas which was also very robust. I went to these shows because we expect to buy some CNC machine tools and fabrication equipment in the near future as we expand our manufacturing in the US.

balancedcitizen

Thanks sd. Useful post.

ToppaTom

1. GM does business in more than 120 countries. Irrelevant

2. Roughly 70 percent of GM sales are generated outside of the United States; in most cases, those vehicles are not exported from the U.S. That’s the problem

3. GM imports no vehicles from China to the U.S. Every Chevrolet sold in the U.S., with the exception of the Spark, is built in North America. Applies to fully assembled vehicles with as many components made in China as possible.

4. Chevy Volt, Buick Enclave and Cadillac SRX, CTS and Escalade are exported from North America to China. For now

5. GM did not use U.S. government bailout money to build manufacturing footprint in China; since bankruptcy, GM has announced investments at 30 U.S. facilities totaling more than $7.1 billion, which created or retained 18,641 jobs. They used “different” money??

6. In 2011, GM exported more than 275,000 vehicles from the United States. And building plants in China to export more from the US?

… a new word -- reshoring. Yes, some of the higher tech manufacturing is moving back to the US. Also this was the largest show in their history. Some always are; outsource three, bring back one

LanceK

A White House report sent to Congress in August 2012 estimated the sale of the remaining G.M. stock acquired by the United States Treasury during the company's bankruptcy would result in a loss of $25.1 billion to the American taxpayer. The total cost to the taxpayer will be determined after the government sells its 26% stake in G.M. and its 74% stake in Ally Financial, formally known as GMAC, G.M.’s financing arm.

Just keeping it real.

HarveyD

Many of us may not appreciate it but, with or without New GM direct or indirect participation, the world will be surprised to see what 1,500,000,000 hard working determined Chinese and a well managed meritocracy can accomplish by 2020/2025.

USA, EU and many other industrial nations will be facing more and more competition and may be tempted to hide behind smart trade walls to fight local unemployment and economic stagnation.

WTO will have to be updated to face the challenge.

Our acquired high living standards are and will be challenged.

HarveyD

Lance...Canada and Ontario have handed out $13.7B to New GM and Chrysler 3 years ago. That's almost 3X as much per capita as USA did.

New GM got $10.8B for 150,000,000 shares @ $72 each. Those shares are now worth about $28 each for a net current lost of about $6.6B. Not at all as good investment so far? The bail out split was 1/3 Ontario and 2/3 Canada. The largest GM plant in Ontario will close down shortly. I guess that's what Ontario got for $4.2B?

Roger Pham

I wonder how much GM got as bail-out money from the Chinese government? Especially for creating so many new jobs in China?

ToppaTom

Lance;

"A White House report sent to Congress in August 2012 estimated ....

Just keeping it real."

You MUST be kidding.

Bob Wallace

"A White House report sent to Congress in August 2012 estimated the sale of the remaining G.M. stock acquired by the United States Treasury during the company's bankruptcy would result in a loss of $25.1 billion to the American taxpayer."

"Without financing during bankruptcy, GM and Chrysler would have had to go out of business, taking down many suppliers. That would have likely caused bankruptcies at the healthier automakers such Ford Motor (F, Fortune 500), who would not have been able to get the parts they needed to build cars. That is why Ford went to Capitol Hill in late 2008 pushing for the rescue of its rivals.

The Center for Automotive Research, a well-respected Michigan think tank estimates that the bailout therefore saved 1.5 million U.S. jobs by keeping GM, Chrysler and the companies that depended on them in business."

http://money.cnn.com/2012/09/06/autos/auto-bailout/index.html

$25.1 billion / 1.5 million = $16,733 per job saved.

Average unemployment check = $295/week. $15,340 per year. One year of unemployment checks would have pretty much equaled the $25.1 billion loss. If we actually loose that much by selling our stock early.

Throw in the tax revenues collected by those 1.5 million people who have been working for four years rather than drawing unemployment and welfare checks and you can see we made out quite well.

Tax payer money very well invested and it has yielded great returns.

BTW, GM stock is up 21% since the August close. About a fifth of that $25.1 billion "loss" has disappeared.

Bob Wallace

Just listened to a report on car manufacturing. Apparently about 90% of manufacturing, parts and assembly, is now being done in the market country or close to it.

Shipping parts and assembled vehicles is too expensive.

China loves Buicks. Our GM should make us some good money there.

HarveyD

BW..USA (like Canada and Ontario) probably paid about $72/share for New GM stock. At current $28/share, they are still losing about $44/share or about 61%. Not a very good investment?

It seems that New GM will make more profits in China in the coming years than in USA/Canada. Wouldn't be surprised that New GM will close many high production cost plants in USA/Canada by 2020 or so.

Future (GM) electrified vehicles and many parts such as batteries, e-motors, controllers etc) will probably go from China/India/South Korea etc to USA/Canada and not the other way around? That will be the way for GM (and many others) to maximize their profits per vehicle sold.

The only way to reverse this trend would be to lower our high production cost or imposed very high (up to 300+?) import tariffs?

Bob Wallace

If the loss as of the end of August was $25.1 billion when GM's stock price was $21.31 and GM's stock price on Friday closed at $25.88 then the loss is less than $25.1 billion.

The United States invested in US auto manufacturing, it didn't make a GM stock purchase. The US did not purchase GM stock at $72. It owned a number of shares before the market set that first day price.

For the money invested in US car manufacturing the US received some GM stock, which is appreciating. It also avoided many billions in expenses in terms of unemployment checks, welfare checks, food stamp, etc. It has also earned dividend in terms of 1.5 million people paying local, state and federal tax for four years.

Going forward the price of GM stock will likely continue to rise as the US economy improves and as GM increases the business it does in other countries. Additionally those 1.5 million people will continue to earn a living and pay more taxes.

It was a most excellent investment.

--

Shipping costs. Don't overlook shipping costs. It's often cheaper to make close to market than to ship halfway around the world. Look how the Japanese, Korean and German car companies are manufacturing in the US. They are not opening plants in China and shipping product from China to the US.

The extremely low labor costs of China are slipping away. The Chinese economy has pulled itself out of the basement, their workers are starting to demand better wages. The labor input for many products is not high enough that a modest wage difference overcomes the cost of shipping.

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