Employees work inside a General Motors plant. Picture: REUTERS
Employees work inside a General Motors plant. Picture: REUTERS

General Motors (GM) will supply advanced batteries to Japan’s Honda Motor, the companies said on Thursday, a move that could significantly reduce the cost of future electric vehicles (EVs) at both car makers after 2020.

GM said the new batteries, which it has branded EME 1.0 and first described last fall, will be smaller than current EV batteries, can be charged more quickly and will provide more energy.

Battery packs, typically the most expensive component of EVs, can cost $10,000 to $12,000 — nearly a third the price of GM’s Chevrolet Bolt EV. GM aims to cut that price nearly in half by 2021, sources told Reuters earlier this year.

GM and Honda on Thursday said they would "collaborate" on the batteries, with GM supplying cells and modules, mainly for EVs to be sold by both companies in North America.

A source familiar with GM’s plans said its current battery cell supplier, Korea’s LG Chem, is expected to provide cells for the new battery, which is mainly a GM design. The new batteries are expected to begin production around 2021, the source said.

GM declined to provide further details, and said it had not finalised supplier agreements for the new batteries. LG Chem did not respond immediately to a request for comment. GM and Honda have a partnership to jointly develop EVs with hydrogen fuel cells that are expected to go on sale in 2020.

Earlier this year, sources told Reuters that a key element of GM’s new battery design is slashing the amount of cobalt, the most costly ingredient in current lithium-ion battery cells. Cobalt prices have soared in the past two years in expectation of a surge in demand from vehicle makers.

GM’s new battery design increases the amount of nickel, which enables batteries to store and produce more energy, the sources told Reuters. Other battery makers are exploring similar changes in battery chemistry and design.