Yay, GM’s Building a Battery Factory in China

With GM planning ten new EVs for the Chinese market over the next three years, the company has decided to get serious about battery supply.

As the world’s most prolific polluter, the Chinese government somewhat ironically enforces some of the most aggressive “new energy” vehicle policies in the world, requiring electric vehicles to make up at least 8% of an OEM’s sales in 2018, stepping up to 10% in 2019 and increasing to 12% in 2020.

Do it or risk banishment from the globe’s automotive gold mine.

Starting with the Buick Velite 5 — the built-in-China Chevy Volt — GM has pledged at least 10 new EVs, PHEVs and EREVs before 2020; with Matt Tsien, president of GM China, promising a pure EV would begin production in the People’s Republic within 2 years.

Well, something needs to power them.

Buried within a late-March press release the company quietly announced it hopes to open a new battery plant in Shanghai later this year, helping SAIC-GM score big points with the Chinese government.

GM’s decision may have been influenced by Chinese regulators’ refusal to certify battery packs from LG Chem for use in Beijing Hyundai vehicles, LG Chem supplies the battery pack for the Chevrolet Bolt.

However, the government’s behavior towards the Korean companies did carry significant political undertones, some analysts speculate the move was in response to Korea’s installation of the U.S.-built Terminal High-Altitude Aerial Defense missile-defense system, which could theoretically stop missiles from China if China were to theoretically shoot missiles at Korea.

GM’s Brownstown Battery assembly plant in Michigan already supplies SAIC-GM with battery packs for the Chinese made CT6 PHEV and Buick LaCrosse PHEV, but with rising trade tensions between the United States and China, it’s possible GM wanted to insulate itself from the Donald Factor.

For what it’s worth, Brownstown was converted from a warehouse to a battery factory in just five months.

Not only does it make sound financial sense to produce batteries where the cars will be built, it could also result in better profit margins on US-built EVs should GM decide to start importing Chinese-built battery packs from itself.

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