China deal boosts GM's green technology drive

General Motors is hoping to accelerate away from its Western rivals in China with a new deal to develop electric vehicles in the world's largest car market.

The US company, which is holding its board meeting in China for the first time this week, announced a collaboration with its local joint venture partner, Saic, to develop new battery technology and low-cost vehicle structures which it can sell both in China – which overtook the US last year to become the world's biggest car market – and in other countries.

GM has been building cars in collaboration with Saic for more than a decade. Nonetheless, relations between GM and its Chinese partner, one of the country's largest car makers in its own right and increasingly a competitor to GM, have appeared complex. For example, the US group has decided not to share the battery technology behind the Volt, its electric car for the Western market.

China has set a target of having one million green vehicles on the road by 2020, up from a few thousand at best currently, and is subsidising consumer purchases of such vehicles by 30 per cent. However, the subsidies are applicable only to vehicles built in the country, excluding GM's Volt and Nissan's Leaf.