General Motors (NYSE: GM) has chosen a unit of South Korea’s LG Chem Ltd (051910.KS) to supply lithium-ion batteries for its Chevrolet Volt, according to a Reuters report published Wednesday.
GM called the article "speculation," but Reuters reported that "two sources briefed on the project" said GM and LG are working out the terms of the supply contract, which is expected to be announced in November.
If the report proves to be true, Compact Power Inc, the unit of LG Chem located near Detroit, will have won a three-way race to woo the U.S. automaker. GE-backed A123Systems and Germany’s Continental AG (CONG.DE) reportedly were in contention for the battery contract as well.
“We’re still testing our battery packs in the lab and on the road,” GM’s Pete Barkey said. “We will announce the battery suppliers by the end of the year.”
LG, which this week announced a major investment in a solar production facility, already has an agreement to supply batteries to South Korea’s Hyundai Motor (005380.KS) and its affiliate Kia Motors (000270.KS).
If GM is successful in launching the Chevy Volt in 2010, it will be the first U.S.-made plug-in hybrid to hit the streets.
Reuters also reported that GM could decide to continue its development agreement with A123Systems in an effort to improve performance and bring costs down.