After a two year neck-and-neck race between battery makers LG Chem and A123, GM awarded its Volt contract to Lucky Goldstar – make that LG Chem, or rather their subsidiary Compact Power: Now the Lucky Guys are waiting for the thing to hit the road in large quantities. A123 was widely regarded as the far better technology, the Koreans most likely were cheaper – we’ll most likely never know.
Now, A123 cut a possibly much bigger and more lucrative deal. A123 is forming a joint venture with China’s top carmaker SAIC to build and sell battery systems for electric vehicles in the world’s largest auto market, and possibly beyond.
According to Reuters, A123’s joint venture with SAIC would build complete vehicle traction battery systems for hybrid electric, pure electric passenger vehicles, and heavy-duty truck and buses in China.
Jason Forcier, who leads A123’s automotive division, wants “to be basically the market leader in China, both in the truck and passenger car market.” With someone like SAIC, this is virtually guaranteed.
Quite oddly, SAIC is also the joint venture partner of GM in China.
With A123, China received leading edge technology, and they will bring the cost down. “Cost is the real driver in this market,” Forcier said. Together with SAIC, he wants to bring down the cost of batteries by as much as 35 percent in the next few years.
Currently, the cost of battery systems for electric vehicles or plug-in hybrids can range from about $8,000 to $15,000.
The venture will be called Shanghai Advanced Traction Battery Systems Co, owned 51 percent by SAIC and 49 percent by A123.
In the short term, the Chinese bus market is seen as an attractive segment for the company, given the government support for electric-powered buses. The passenger car market is much more lucrative in the long term, Forcier thinks. China is serious with electric vehicles, a solution thought to solve the smog problem and the dependency on foreign oil. China has coal and nuclear power in abundance.
A123, founded by scientists linked to MIT, is currently working with BMW, Daimler, and Renault. A123 also has relationships with suppliers like Delphi and Magna Steyr.
First job of the JV between A123 and SAIC will be to develop batteries for the hybrid Roewe 750 sedan and a plug-in hybrid version of the Roewe 550. They should hit the market in 2012.
If the Volt ever makes it to China, you can bet your sweet derriere that it will be powered by batteries Made-in-Shanghai.