GM to Build EVs With SAIC; Sell Chevy Volt in China

General Motors Vice Chairman Steve Girsky is quick to quash speculation the U.S. auto maker plans to share intellectual property for the Chevy Volt extended-range electric vehicle with partner SAIC in a deal to develop EVs in China announced today.

“We’ve had no requests for intellectual property from SAIC or the Chinese government,” he says during a conference call today to announce an agreement between the two auto makers to jointly develop EVs for the Chinese market.

Chevy Volt technology won’t be shared.

“(SAIC) is not getting Volt technology as a result of this agreement,” Girksy says.

Under the deal, the partners’ jointly owned Pan Asia Technical Automotive Center will develop a new EV architecture, and teams from both auto makers will work on development of key components. The EVs will be designed from the ground up as electrified vehicles and not converted from an existing platform.

Girsky hints the auto maker will look at its existing EV technology to see if parts of it would be a good fit for the jointly developed EVs, but insists there will be no direct transfer of technology.

“The Volt is packaged differently because it has a different value proposition,” he says. “It has an engine that acts as a generator, while a pure EV is a pure EV.”

The partners will use their jointly developed architecture to build EVs in other countries, as well, GM says. The models produced in China will be sold under two separate brands: Shanghai GM, which sells Buick, Chevrolet and Cadillac, and SAIC’s own domestic brand.

Establishing PATAC as the engineering center for the EV architecture reflects the trust and confidence GM and SAIC have in each other, a statement from GM China says. The two auto makers are making an equal investment in the project.

“We’ve been doing business with SAIC for nearly 15 years,” Girsky says. The JV “helps lower costs and risks and (allows) us to bring technology to market faster and scale it to lower the cost of the product.

“We have 10 different JVs with SAIC, and we’ve been growing share in China,” he adds. “We make a lot of money here, and it’s because we work with our partner to satisfy customers.”

The Chinese government has said it wants to have 1 million electric vehicles on the road by 2015 and is demanding foreign auto makers share EV technology with their Chinese partners. Nissan and Daimler both have agreements to build EVs in China.

However, Girsky says demand for EVs in China is hard to predict, as a charging infrastructure is not yet in place.

Plus, industry observers in China say demand among Chinese consumers is less than tepid.

“It’s a chicken-and-egg (scenario),” Girksy says. “We’re waiting on how the Chinese government develops the infrastructure, and time will tell. We’re making billion dollar bets here, and we don’t know the conclusion.”

Launch timing for the new EVs will be revealed at a later date, Girsky says. Meanwhile, he confirms plans to export a limited number of Volts to China by year’s end. “Our strategy is to sell a small number in different markets to see how consumers react and (decide) where we go from there.”

All Volts are produced at GM’s Detroit-Hamtramck, MI, assembly plant, and Girsky says there are no plans to build the car elsewhere.

The Volt will be at a disadvantage in China, because it won’t qualify for a government-backed 50% incentive program for locally made EVs. It also will be hit with the county’s high import tax.

But Girsky is unfazed, hinting the auto maker eventually may produce EREVs in China. “If we localize eventually, we will not get the tariff and will get subsidies.”

Girsky makes his comments from Shanghai, where GM Chairman and CEO Dan Akerson and the rest of the board of directors are gathered for their annual meeting this year. The event marks only the fourth time in the auto maker’s history that the board has convened outside of the U.S.

– with Vince Courtenay

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