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GM again moving in the direction of battery-powered car

General Motors Corp., vilified as the automaker that killed the electric car, took a major step toward putting one back on the road Tuesday, awarding contracts to two suppliers to develop lithium-ion batteries that could power electric vehicles within a few years.

General Motors Corp. did not say when it expects to have batteries ready for production, but it previously said it could introduce a plug-in hybrid electric as early as 2010. GM unveiled such a concept car in January, the five-passenger Chevrolet Volt with an E-Flex „plug-in” system that theoretically could travel up to 40 miles on battery power, enough to satisfy the daily driving needs of many motorists. But current technology—nickel-metal-hydride batteries—that could power a compact car such as the Volt would take up much of the passenger and cargo space.

The contracts GM announced Tuesday at its annual meeting in Wilmington, Del., would provide advanced lithium batteries within a year, and GM could test them in the Volt with a conventional internal combustion engine or a fuel cell. Lithium batteries have greater capacity and are more compact than nickel-metal-hydride batteries but generate more heat. They have caused fires in laptop computers and other electronic devices.

„Given the huge potential that the Volt and it E-Flex system offers, this is a top priority program for GM,” Rick Wagoner, the company’s chairman and chief executive said at the annual meeting, where he also assured shareholders the company’s turnaround plan is on track. GM awarded contracts to Compact Power Inc. of Troy, Mich., a subsidiary of Korean battery manufacturer LG Chem, and Continental Automotive of Germany, a subsidiary of Continental AG, one of the largest auto suppliers. Terms were not disclosed.

In January, GM announced separate agreements to develop lithium-ion batteries for a plug-in version of the Saturn Vue sport-utility vehicle that could run 10 miles on electricity before a gas/electric system takes over. GM has undertaken—and abandoned—similar projects in the past. Such was the case with the two-seat EV1, an electric it built in small numbers from 1996-2000 to satisfy a California mandate for zero-emissions vehicles. GM cited low demand when it stopped building EV1, which had a range of about 80 miles, after California eased the mandate.

Though other automakers similarly stopped building electrics, GM was singled out in the 2006 documentary „Who Killed the Electric Car?” With plug-ins, GM appears to have it right, said Thad Malesh, principal of Automotive Technology Research Group, a California-based consultant that specializes in hybrids and other advanced technology. „They may not build the Volt, but the whole notion of the plug-in hybrid is doable, and I think it could be done in a couple of years,” Malesh said. Current hybrids such as the top-selling Toyota Prius operate on electric power only at low speeds before the gas engine kicks in and carries most of the load.

At highway speeds, when internal combustion engines are more efficient, Prius runs entirely on gasoline power. With the Volt plug-in, batteries supply all the power until they are depleted, and then the gas engine runs a generator to recharge the batteries. A driver who doesn’t travel far enough to drain the batteries can plug in at home and wouldn’t use any gas. Malesh said consumers rejected electrics out of fear they would be stranded if their batteries ran out of juice. He says a 40-mile range on battery power is „close to the minimum people will accept,” with 75 miles the key. „If you can go 75 miles on just the batteries, you would never turn on the engine,” he said.

Toyota, Ford and other automakers are working on plug-in technology. Both say it is still years away, but Malesh thinks Toyota could offer a plug-in on the next-generation Prius. GM’s announcement comes as hybrid sales are rising along with gas prices. Prius sales tripled to 24,000 last month from the previous May, for example, and Honda Civic Hybrid sales grew nearly 6%, to 4,500. Honda is dropping the slow-selling Accord Hybrid sedan after the 2007 model year. „The Accord Hybrid sold fine at first, but as the hybrid market evolved it become apparent that customers were demanding maximum fuel economy,” Honda spokesman Sage Marie said, adding that Honda also plans to offer a diesel engine in its larger models within two years.

The Accord Hybrid has a $31,090 base price and gets EPA fuel economy estimates of 28 m.p.g. city and 35 m.p.g. highway. The Civic Hybrid, priced from $22,600, is rated at 49 city and 51 highway. Accord Hybrid sales were 16,826 in 2005, its first full year on the market, but they slipped to 5,598 last year and are down 40% through May to 1,702. Honda sold just 439 last month. Malesh agreed that the V-6 Accord Hybrid is „just too expensive, and they tilted it more for performance than for fuel economy.” (