GM announces EV development deal with Chinese partner

MSN Autos - General Motors announced in Shanghai today that it will jointly develop an electric vehicle with longtime Chinese partner SAIC -- a move that some U.S. lawmakers have likened to a shakedown.

China has built its manufacturing infrastructure around low-cost production and continues to lag behind other developed countries when it comes to developing and implementing cutting-edge automotive technology. For the past 25 years, the Chinese government has required foreign automakers to partner with Chinese companies, which are required to own a stake of at least 50 percent. China also imposes heavy tariffs on imported cars, which some argue violates world trade rules, and offers substantial subsidies of about $19,000 per electric vehicle only for cars built in China.

GM Vice Chairman Steve Girsky seemed to hint to journalists that the Chevy Volt could be built in China in the future, saying that if GM localizes production in China, "eventually [the Volt] won't have a tariff and it will get the subsidy." But he said no decision had been made on that front and denied that SAIC or the Chinese government had demanded the proprietary Volt technology. GM has stated it will not hand over the intellectual property that underpins the Volt, though a future electric car developed with government-owned SAIC will undoubtedly be based on that technology to a certain degree.

The deal was signed during a GM board meeting in Shanghai, the first to take place outside the U.S.

China overtook the U.S. as the world's largest car market in 2009. On Monday, SAIC, which began production in late 1998, saw its 5 millionth vehicle roll off the assembly line.