Depending on how you interpret it, the partnership announced between General Motors and LG Corp could be seen as a collaboration or some heavy-duty outsourcing. The result is the same: GM has the Korean electronic company producing a great deal of the Chevy Bolt EV that will hit the assembly line in 2016. It will be interesting to see how the future electric vehicle will score in the annual Made in America Auto Index from the Kogod School of Business.
The Made in America index always delivers a few fun surprises. In 2015, we saw how the Toyota Camry could chant “U.S.A.” louder than most Jeeps and cars like the Chevy Spark EV had less than half of their content sourced in America. In the index, 50% of a car’s score is based on the body, chassis, electrical components, and interior of the vehicle. On the most recent list, the highest score for this section was 40 and the highest overall score 87.5, meaning every car for sale in the U.S. contains at least 12.5% foreign parts.
We learned from the GM October 20 statement that a large amount of the Bolt EV will be sourced from a foreign manufacturer, albeit one that has facilities in the U.S.. The electric motor, onboard charger, climate control compressor, battery pack, infotainment system, instrument cluster, and battery heater are among the parts that LG will deliver for the automaker’s first mass-market EV, GM said.
Judging by criteria used in the Made in America Auto Index, that would push that score below 25 (of 50) in that department if they come from overseas. Other parts of the score include the research and development (R&D) phase as well as the site of assembly for engine and transmission components. GM has not disclosed where these parts will be manufactured, but the statement about the Bolt EV shed some light on R&D.
“LG Electronics has invested more than $250 million in an engineering and manufacturing facility in Incheon, Korea, to support the component development and manufacturing for Bolt EV components,” GM said.
At the very least, the Bolt EV would be docked for part of its score in the R&D section (6%) and may take further hits on transmission assembly (7%) and engine assembly (11%). According to a Chevy spokesman, details on the site of production for these components will emerge closer to the car’s launch. Either way, the car will represent a landmark in range (200 miles) and price point (near $30,000 after incentives) when it begins rolling off the Orion Township (Mich.) assembly line.
Though GM’s Mark Reuss emphasized the “engineering prowess established with the Chevrolet Volt and Spark EV,” he acknowledged the automaker was not ready to take on the challenge this type of EV would present in the short term. According to Autoblog, Reuss admitted “GM was lacking that [electrification knowledge] in a very complete way for many years. I’ll just be frank about that.”
The choice between delaying the Bolt to bring the EV technology in-house and outsourcing the electrical systems to LG was no choice at all, in our estimation. Heck, collaboration on this level may be exactly what the auto industry needs to accelerate green car programs. We know diesel isn’t the answer and we know improvements in gasoline engine efficiencies come too slowly.
In this discussion, outsourcing becomes a rather clean word. If LG plants in America end up in charge of the motor production, it would be a win for both consumers and U.S. labor, not to mention the air quality of a town near you.
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