GM plans gas-electric car to catch up to Toyota, people say

General Motors Corp., losing sales to fuel-efficient cars from Toyota Motor Corp., is developing a hybrid-electric vehicle with a battery that recharges at any outlet, said GM officials familiar with the plan. The so-called plug-in hybrid would travel more than 60 miles on a gallon of gasoline, said the people, who asked not to be identified because the research is secret. GM, which had the first modern electric car in 1996, lags behind Toyota in hybrids, which combine electric motors and gasoline engines. A 28 percent rise in U.S. gasoline prices this year helped boost sales of Toyota's gasoline-electric models 37 percent, giving the Japanese automaker almost three-fourths of U.S. retail hybrid sales. GM doesn't make competing vehicles now. Automakers are trying to raise fuel efficiency as U.S. lawmakers consider tougher requirements for cars and trucks. "There is rising regulatory demand and consumer demand for improved fuel economy and lower emissions,'' said John Casesa, an auto analyst at New York-based Casesa Shapiro Group LLC. "There's a lot of pressure to show you're responsive.''

The plug-in designs GM is testing may be ready in time for the Detroit auto show in January, the people said. Any commercial production is at least a year away, they said. The people declined to say how much the company is investing. Chris Preuss, a spokesman for Detroit-based GM, declined to comment on any plans for a plug-in hybrid.

Battery Power
Plug-in hybrids recharge when the vehicle isn't in use and switch to the gasoline engine when the batteries are drained. Automakers quit making cars powered solely by batteries in the late 1990s because they were expensive and needed recharging for as long as six hours to travel 75 miles. "Range is not an issue with a plug-in hybrid because you always have the engine if you need it,'' said Bruce Belzowski, assistant research scientist at the University of Michigan Transportation Research Institute. Regular hybrids use friction from braking and power from the engine to recharge the battery for the electric motor. The motor is used at start-up and lower speeds, and the engine powers the vehicle at higher speeds. 

Higher Mileage Than Prius
Fuel economy will significantly exceed 60 miles per gallon, the people said, declining to be specific. Toyota's Prius, the best-selling hybrid, is rated at 55 mpg in combined city and highway driving. The Prius doesn't use plug-in technology. DaimlerChrysler AG already is testing a plug-in hybrid version of its Sprinter commercial van in the U.S. The automaker said in March that it would test 40 of the Sprinters, which can go as far as 20 miles on electric power only. GM has a hard choice on ``hybrid and fuel-cell research versus current product development,'' said Brian Bruce, who helps manage about $18 billion at PanAgora Asset Management in Boston, including the automaker's shares. ``If they spend too little on current development, there might not be much of a company going forward. If they spend too little on future development, they could arrive in the future with nothing competitive.''Toyota, which is second to GM in vehicle sales, is spending a record 920 billion yen ($7.9 billion) on research and development this year. GM spent $6.7 billion last year and hasn't released a 2006 figure.

Toyota Plans
The Japanese automaker said it's studying plug-in technology. The Toyota City-based company has no immediate plans for a plug-in vehicle because of the much larger battery needed, President Katsuaki Watanabe said last week Toyota said June 13 that it plans to double its hybrid models to 14 by early in the next decade and sell 1 million of the vehicles annually as early as 2010. The company began hybrid sales in 1997 and sold 235,000 worldwide last year. Toyota earned $12.1 billion in the year ended in March, its fourth straight annual record. GM lost $10.6 billion last year. The Japanese automaker's U.S. shares rose 39 percent in the past 12 months, as GM's fell 22 percent. Toyota increased U.S. sales 8.8 percent this year through May, while GM's dropped 8 percent. GM's first hybrid SUV, the Saturn Vue sport-utility vehicle, debuts this year. It won't have plug-in technology and will average 32 miles a gallon on the highway, five miles more than a non-hybrid Vue. The automaker's most fuel-efficient model is the Chevrolet Aveo small car, at 35 miles a gallon. GM's U.S. vehicles lag behind competitors such as Toyota and Honda Motor Co. in fuel economy, according to data compiled by the National Highway Traffic Safety Administration. The average U.S. retail price for regular gasoline is $2.87 a gallon this week and has risen 28 percent this year, according to Energy Department figures. The record was $3.07 in September. The plug-in research isn't directly tied to GM's hybrid project with DaimlerChrysler and Bayerische Motoren Werke AG, the people said. The first GM model from that effort, a version of the Chevrolet Tahoe SUV, is scheduled to go on sale next year. It won't plug in. (Bloomberg)