GM and LG Renew Their Vows

There's a theme going around with electric cars: Two companies are better than one.

The latest duo to ink a deal is General Motors (NYSE: GM  ) and electronics conglomerate LG Group. The companies have announced an agreement to develop electric vehicles. The companies will share development costs and benefit from each other's respective expertise.

By co-developing electric cars, GM hopes to accelerate the typically multiyear design and development process. The companies are already business partners: LG currently supplies the lithium-ion battery cells used in the Chevy Volt and its European cousin, the Opel Ampera. The new deal will allow LG to contribute to the design structure beyond just the battery itself.

Neither company has given a lot of detail on what models will be jointly developed or even what exactly LG will contribute. The timing coincides with the confirmation of the Cadillac ELR entering production, so that vehicle is a possible candidate although it's still a plug-in hybrid.

This may come as a bit of a snub to A123 Systems (Nasdaq: AONE  ) since that company had also recently landed itself a deal with GM as a lithium-ion battery supplier. The deal with LG doesn't prohibit GM from partnering with other companies, so GM may potentially continue to tap A123 for batteries.

Ford Motor (NYSE: F  ) also inked an agreement with SunPower (Nasdaq: SPWRA  ) earlier this month to sell solar panel installations that could power its upcoming Focus Electric. Meanwhile, Toyota (NYSE: TM  ) has tapped Tesla Motors (Nasdaq: TSLA  ) to build an all-electric Rav4.

There are a lot of deals being made to accelerate the transition to electric cars. This might have something (or quite a bit) to do with a new federal mandate for car makers to increase their average miles per gallon to 54.5 by 2025. There's a lot to look forward to over the next 10 to 15 years in the auto industry. Personally, I favor Ford and Tesla as my stocks in the sector.

What do you think is the best way to profit on the electric car revolution? Share your thoughts in the comments below.

Fool contributor Evan Niu owns shares of Tesla Motors and Ford Motor, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of Ford Motor and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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