Shares in LG Electronics surged over 14 percent after the South Korean electronics giant announced that it would be providing key components for General Motors' upcoming electric car.
The partnership is expected to help GM bring its Chevrolet Bolt EV (electric vehicle) – which was announced earlier this year – to the market by the end of 2016.
GM is the latest entrant into the EV market and the partnership with LG is a bid to help it compete with the likes of Tesla as well as the entrance of tech giants such as Apple and Google in the space.
"Chevrolet needs to be disruptive in order to maintain our leadership position in electrification," Mark Reuss, GM product boss, said in a press release on Wednesday.
"By taking the best of our in-house engineering prowess established with the Chevrolet Volt and Spark EV, and combining the experience of the LG Group, we're able to transform the concept of the industry's first long range, affordable EV into reality."
Tech titans in auto space
LG is supplying a number of components to GM including battery cells and packs, the infotainment system and the electric motor, designed by GM. The Bolt EV will be "affordable" and deliver 200-plus miles of all electric driving, according to the companies.
LG also said it has invested more than $250 million in an engineering and manufacturing facility in Incheon, Korea, to support the development and manufacturing for Bolt EV components.
The tie-up between the two firms highlights how traditional auto makers have been keen to boost their tech capabilities to compete with the new players. Earlier this year, a consortium of German carmakers made up of Daimler, BMW and Audi, bought Nokia's HERE mapping system for 2.8 billion euros ($3.2 billion), a technology seen as a key component for driverless cars.
LG and GM's partnership also shows the appetite for electronics companies to jump into the autos space. Speculation has been rife that Apple is working on an electric car with chief executive Tim Cook saying at the WSJDLive conference this week that the . Google is also currently testing driverless cars.
The South Korean tech titan is hoping to be a relevant player in the sector.
"Being selected as GM's EV technology partner positions LG as a key player in next-generation vehicular technologies," Lee Woo-jong, president and CEO of the LG Electronics Vehicle Components Co, said in a statement.
"The opportunity to work with GM on such game-changing technology is indicative of exactly the type of contributions that traditional tech companies can make in the automotive space."
This is not the first partnership between LG and GM. In 2007, LG Electronics provided the components needed for OnStar, GM's telematics system in its cars. Then in 2010, LG was chosen as the sole supplier of battery cells for the first-generation Chevrolet Volt, which launched in 2010.
