GM signs agreement with MIT-spinout to reduce EV battery costs by 60%

General Motors has signed an agreement with the Massachusetts Institute of Technology to jointly develop state-of-the-art electric vehicle batteries that are expected to reduce the cost of the technology by 60%.

The Singapore-based partnership with SolidEnergy Systems, founded by MIT graduate Qichao Hu, is focused on new battery chemistry to reduce battery size while increasing the range of an EV. This helps to reduce the cost of vehicles.

As part of the agreement, GM and SolidEnergy Systems plan to build a production line prototype in Woburn, Massachusetts, for a “high-capacity pre-production battery by 2023.”

GM previously announced that the second generation of its batteries and EV platform, known as Ultium, would reduce the costs of today’s EVs, such as the Chevrolet Bolt EV, by 60% in the middle of the decade.

“The Ultium platform was really designed and built with changes like that in mind,” Kent Helfrich, GM’s executive director of global electrification and battery systems, told CNBC. “We know that battery technology changes very quickly … so we had to build that kind of flexibility and bandwidth on our platform.”

The authorities refused to disclose financial details of the union. GM’s venture capital arm initially invested an undisclosed amount in SolidEnergy Systems in 2015.

The new batteries feature lithium metal instead of lithium ion as EVs use today. The option changes the chemistry of the battery to allow greater energy density and greater range for a battery of similar size or range comparable to a smaller battery.

The batteries in the initial prototype have already completed 150,000 simulated test miles in research and development labs at GM’s Global Technical Center in Warren, Michigan, according to the automaker.

Future battery development comes before the automaker launched EVS with its first generation of Ultium battery cells later this year, starting with the GMC Hummer EV for $ 112,595.

The Hummer is part of GM’s plan to launch 30 new or redesigned electric vehicles by 2025, with a $ 27 billion investment in electric and self-driving vehicles. GM also recently announced plans to sell electric vehicles exclusively until 2035.

GM’s announcement comes a day after a new report by Cairn Energy Research Advisors that said EV leader Tesla should continue to have the lowest costs in the EV industry until the end of this decade, with GM closing the gap.

Helfrich declined to discuss these findings specifically, but said GM plans to “innovate faster than anyone in the industry” and be “the world’s largest partner in terms of developing solutions that will electrify the automotive industry”.