GM and Honda are joining forces to create the next generation of batteries for electric cars

Chevrolet

The Chevy Bolt EV.

• General Motors and Honda announced a deal to develop next-generation electric-battery technology.
• GM will ultimately supply Honda with batteries for the North American market.
• The deal comes after GM and SoftBank revealed a $3.35 billion investment in GM's Cruise self-driving division.
• GM intends to bring 20 new EVs to market by 2023.

General Motors might be over 100 years old, but the carmaker isn't slowing down in its march to the future.

After announcing a $3.35-billion investment in its Cruise self-driving division by Japan's SoftBank and GM itself, the company on Thursday said that it has struck a deal with Honda to develop and supply electric-vehicle batteries.

Complimentary Tech Event

Transform talent with learning that works

Capability development is critical for businesses who want to push the envelope of innovation.Discover how business leaders are strategizing around building talent capabilities and empowering employee transformation.Know More

"This new, multiyear agreement with Honda further demonstrates General Motors'' capability to innovate toward a profitable electric portfolio," vice-president and product czar Mark Reuss said in a statement. "GM's decades of electrification experience and strategic EV investments, alongside Honda's commitment to advancing mobility, will result in better solutions for our customers and progress on our zero emissions vision."

In the arrangement, GM will supply Honda with advanced battery packs.

"The next-generation battery will deliver higher energy density, smaller packaging and faster charging capabilities for both companies' future products, mainly for the North American market," GM said in a statement.

GM has committed to bringing 20 new all-electric vehicles to market by 2023. That effort will require a lot of batteries, so the carmaker is logically partnering with Honda because the automakers have joined forces before, to develop fuel-cell technologies.

The announcement also signals GM's intention to create new business opportunities. The new Cruise investment has given that division an $11.5-billion valuation within GM, whose current market capitalization is about $60 billion.

Now GM has decided that if better batteries are to be built, the GM - with an assist from Honda - will build them. And in the process create a new line of revenue and profits.