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GM, Chinese firm in pact to build electric cars

By Keith Bradsher
New York Times / September 21, 2011

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HONG KONG - General Motors said yesterday that it would develop electric cars in China through a joint venture with a Chinese automaker, and would transfer battery and other electric car technology to the venture.

GM, which is already the largest foreign maker of conventional vehicles in China, is keen to help define the emerging generation of green-energy automobiles here. And the state-controlled Chinese auto industry is just as eager for expertise from GM, an acknowledged global leader in electric car technology.

Yesterday’s announcement was being made as the Chinese government was putting heavy pressure on foreign automakers to transfer electric car technology to joint ventures in China. But GM took pains to say that its joint-venture agreement was not connected to its plans to begin importing its new US-made Chevrolet Volt electric car to China this year. Â

“They are not linked,’’ Stephen J. Girsky, GM’s vice chairman, said in a telephone interview after GM’s first board meeting in China, held yesterday in Shanghai.

Girsky said the Chinese government had not requested the transfer to China of specific technologies from the Volt, and that GM understood that the Volt would not be eligible for the generous consumer subsidies China offered buyers of clean-energy cars.

Instead, he said, GM’s decision to develop electric cars in China would be part of the company’s effort to improve the technical capabilities of its joint ventures in China, as the country’s car buyers become more demanding. GM holds minority stakes in joint ventures in China that sell more cars each year than GM sells in the United States.

The new electric car development effort will be through one of several joint ventures that GM already has under China’s biggest auto company, Shanghai Automotive Industry Corp.

The joint venture is the Pan Asia Technical Automotive Center, which is in Shanghai and has already helped develop the Buick LaCrosse eAssist now on sale in the United States and China. The LaCrosse is a so-called mild hybrid in which electric motors help increase the fuel economy of a vehicle that still relies mainly on a gasoline engine.

GM has been a leader in electric car technology, as many other automakers have been more interested in hybrids.

The Chevrolet Volt, made in Hamtramck, Mich., is GM’s biggest bet on a commercial electric car.

Electric cars and other “new energy vehicles,’’ as the Chinese government calls them, are eligible for generous national and municipal subsidies in China totaling up to $19,300 per car. But for foreign manufacturers’ cars, that money is not available unless the maker has transferred important parts of the technology to a Chinese partner.

The lack of subsidies will place the Volt, which retails for $41,000 in the United States, at a distinctive disadvantage if GM sticks with plans to start importing it from the United States for sale in China by the end of this year.