GM Reportedly Close to Deal With LG Chem for Volt Battery

General Motor’s great electric hope — the Chevy Volt — will likely first go to market with a battery made by Compact Power, a unit of LG Chem, according to a report in Reuters citing undisclosed sources (hat tip AutoblogGreen and GM-Volt). GM and LG Chem are reportedly working out the commercial deal now, which is expected to be announced in November potentially at the LA Auto Show. GM’s decision about which company supplies battery packs for its Volt is a really big deal, because the Volt will be one of the first mass-produced electric cars to come out of the traditional auto industry.

And that’s not such great news for A123 Systems and its German partner Continental, which had been named back in mid 2007, along with LG Chem, as one of two companies working with GM on battery development. Good thing A123 Systems has yet to go public — the company filed August — as its stock would likely take a hit this morning (though GE did announce that it had upped its stake in A123 yesterday). But the Reuters report also says that GM could continue to work with Continental and A123 on battery development work for future Volt versions “in an effort to drive costs down and improve performance for the expensive batteries.”

Previously GM’s outspoken Vice Chairman Bob “I Don’t Believe in the CO2 Theory” Lutz had said that GM had already chosen a battery supplier, and other media reports had rumored that LG Chem was the initial winner of the Volt deal.


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