GM: Electrifying Cars in China

On Tuesday, General Motors (NYSE:GM) announced a new step in its 5-year plan with China (NYSE:FXI).  General Motors is now teaming up with SAIC Motor to build electric cars in Shanghai for the Chinese market.  The market for electric cars in the United States has been less than ideal as concerns remain about price and battery life.

Ford (NYSE:F) has already been a topic of concern as the company had some confusion regarding its electric Ford Focus launch in the US.  However, GM Vice Chair Steve Girsky insists that the decision to build and design electric cars in China is about capitalizing on opportunities.  He says, ” China is on the leading edge on electric policy.  China has spent a lot of money on the electric market.”  GM will jointly design and develop electric cars with SAIC, the biggest Chinese automaker. General Motors has a 15 year relationship with SAIC.

Concerns have surfaced that the Chinese have been pressuring GM to share its technology used in its Chevy Volt electric car.  However, Steve Girsky claims that there has been “no request from China for Volt IT.  We have not been approached at all.”  He goes on to explain that building electric cars is risky and expensive, and the Chinese deal is simliar to General Motors’ recent deal with South Korea’s LG Corp, which is aimed at developing a new lineup of battery-powered vehicles more efficiently.  Last month, GM also made a deal with lithium-ion battery maker A123 Systems (NASDAQ:AONE) to supply batteries for future electric vehicles.  Ford and Toyota (NYSE:TM) are also teaming up to develop a gas-electric system for trucks and sports-utility vehicles.  Other electric car companies include Tata Motors (NYSE:TTM), Honda (NYSE:HMC), and the ultra fast and stylish Tesla Motors (NASDAQ:TSLA).