[AMERICA 123]

http://www.reuters.com/article/marketsNews/idCAN2239779020081022?rpc=44

75% of the article follows.

LG Chem to supply GM Volt batteries -- sources
Wed Oct 22, 2008 5:27pm EDT

* GM to name Volt battery supplier in November

* First-generation Volt to use LG Chem batteries

* GM, LG Chem discussing battery warranty costs

* GM, LG Chem, Compact Power, A123 decline comment

By Soyoung Kim

DETROIT, Oct 22 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) has chosen a unit of South Korea's LG Chem Ltd (051910.KS: Quote, Profile, Research, Stock Buzz) to supply lithium-ion batteries for its Chevrolet Volt and is working out the terms of a supply contract expected to be announced in November, two sources briefed on the project said.

Compact Power Inc, a Detroit-area based unit of LG Chem, and a partnership between Germany's Continental AG (CONG.DE: Quote, Profile, Research, Stock Buzz) and U.S.-based A123 Systems have been in the race to supply the electric Volt with battery packs.

The Volt battery contract has been closely watched as one of the first tests of the challenge of adapting the lithium ion batteries popular in consumer electronics for a new generation of electric cars.

The 400-pound battery pack designed for the the Volt is also expected to be the most expensive element of the rechargeable car and its single most important component.

The Volt is on track to become the first mass-market, plug- in hybrid when it is launched in 2010. It has also become a symbol of GM's effort to reinvent itself at a time when its sales are slumping and its ability to survive the downturn has come under scrutiny.

GM and Compact Power are now discussing the details of a commercial agreement, including how to split warranty costs for the batteries, according to two people familiar with the talks who asked not to be identified because they were not authorized to talk about the high-profile deal.

Most of the Volt prototypes GM is testing are running with LG Chem batteries, the sources said, adding that the prototypes have continued to perform without any glitches.

Although LG Chem is now close to a final deal for the first-generation Volt battery, GM could opt to keep the Continental consortium doing battery development work for future versions in an effort to drive costs down and improve performance for the expensive batteries, the sources said.

A GM spokesman said no final decision on a battery supplier had been made and repeated the automaker expected to announce one by the end of the year.

An LG spokesman in Seoul said: "We were informed that the results are due in November, but we didn't get any official answer from GM yet. We hope for and expect a good result."

GM Vice Chairman Bob Lutz, who has shepherded the Volt through its development since a concept version was unveiled in January 2007, was quoted as saying in August that GM had already made a decision on a supplier, but was not ready to announce one.

Continental and A123 were not immediately available for comment. Compact Power declined comment. -

(Additional reporting by Kevin Krolicki in Detroit and Angela Moon in Seoul; Editing by Andre Grenon)

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[SenorDad]

Wait, this can't be true.

So, GM, you know, Born in the USA GM, will have the most expensive part of its game-changing Volt made in KO-rea--while the EE-vil Toyota will have the batteries for its Prius, Camry and Highlander hybrids made in the USofA along with the rest of the vehicle?

Doesn't sound right to me.

 

[stormwatcher]

So, GM, you know, Born in the USA GM, will have the most expensive part of its game-changing Volt made in KO-rea--while the EE-vil Toyota will have the batteries for its Prius, Camry and Highlander hybrids made in the USofA along with the rest of the vehicle?

Doesn't sound right to me.

Toyota has no plans at present to make their hybrid batteries in the USA; they will be imported.

 

[CompG_Dude]

Wait, this can't be true.

So, GM, you know, Born in the USA GM, will have the most expensive part of its game-changing Volt made in KO-rea--while the EE-vil Toyota will have the batteries for its Prius, Camry and Highlander hybrids made in the USofA along with the rest of the vehicle?

Doesn't sound right to me.

Unless I'm reading the wrong article, it doesn't say where the battery will be made. The article also says that Compact Power (a Detroit based subsidiary of LG Chem) is the unit of LG that would be making the batteries... So its possible the batteries would even be made in Detroit.

Compact Power is the company that won the contract for the battery development in 2007. So it makes sense GM would look to them for the production as well.

 

[prototype66]

This morning from GM-Volt.com
http://gm-volt.com/2008/10/22/breaking-lg-chem-and-compact-power-inc-to-supply-volt-battery-packs/



BREAKING: LG Chem and Compact Power Inc. to Supply Volt Battery Packs
October 22nd, 2008 | Posted in: Battery




Reuters has just reported inside sources have confirmed that GM has chosen LG Chem along with Troy, Michigan-based Compact Power Inc. to supply the lithium-ion battery packs for the first generation Chevy Volt.

The contract will be announced in November and the terms are still being worked out.

GM and Compact Power are apparently working out the details of the commercial agreement and how to split warranty costs for the batteries.

GM hasn’t confirmed these reports but an LG Chem spokesman in Korea stated “we were informed that the results are due in November, but we didn’t get any official answer from GM yet. We hope for and expect a good result.”

As we have heard before in a subtle way from GM vice-chairman Bob Lutz, GM was only using one supplier’s packs in the mules. Concurrently, we had heard from Compact Power’s CEO that his batteries were being used in the mules. Sources have now confirmed this is the case and that the mules packs are performing flawlessly.

A123/Continental could still potentially supply Volt packs in the next generation.

Source (Reuters)

 

[VibenPontiac]

You buy the best possible products for the best possible price. If LG Chem beats out A123 on this basis then its just the way it is. It sucks that a U.S. company didn't win the contract but GM can;t afford to take any chances at the present.

 

[prototype66]

Yea I was pulling for A123 to get this first contract but the new battery system they are working on will be for the second generation Eflex system from what I hear. Still giving Michigan some much needed economic boost and jobs.

 

[zete]

Are the prototypes that should be on the road late this year still on track? Will some of these packs arrive in time? I'm pretty pumped to see actual pre-production Volt mules driving around Detroit soon! That'd be awesome news.

As for who wins, pick the best. If there's enough demand for Volts I can see GM issuing another contract to A123 for batteries, assuming they also meet GM's requirements.