DETROIT --- In light of Toyota's announced plans to test its newly developed plug-in hybrid vehicle on public roads in Japan, auto industry analysts are all the more interested in General Motors' progress in developing its plug-in hybrid Chevy Volt. GM has also selected two companies to work on battery development projects for the Volt development effort, Reuters reported. Last month, CEO Rick Wagoner announced that Compact Power, part of Korea-based LG Chem, will test a lithium-ion battery pack to power the Volt and will integrate other batteries manufactured by its parent company. Meanwhile, a division of German auto supplier Continental AG will focus on integrating batteries supplied by Massachusetts-based A123 Systems. Compact Power Inc., based in Troy, Mich., will develop a lithium-ion battery system for GM's E-Flex propulsion system. "We are honored to partner with GM in bringing a line of vehicles to the marketplace that is technologically advanced and provides exceptional fuel economy," said Prabhakar Patil, CEO of CPI. During the 12-month period of the development program, CPI will go through three phases: battery cell/module development and testing, battery pack development and testing, and in-car integration and testing. Some industry analysts expect lithium-ion batteries to surpass nickel-metal hydride (NiMH) batteries as the standard for hybrid electric vehicles in the next three to five years. They point to several advantages that lithium-ion has over NiMH batteries, including higher voltage, lower weight, smaller volume, greater power and performance, longer life, wider temperature range performance, and less environmental impact. Last month, GM made it clear the company wanted to speed up development of the Volt when it reassigned 500 engineers. According to a report from Bloomberg, the engineers transferred from research and development to production engineering and other areas focused on preparing the Volt for market. Larry Burns, vice president of R&D, told Bloomberg that the Volt and its fuel-cell powerplant were moving from the theory stage to the reality stage. GM also plans to build more than 100 Chevy Equinox fuel-cell models starting this year to demonstrate the technology, which converts hydrogen into electricity. The only byproduct is water. Moreover, GM is developing a plug-in hybrid version of the Saturn Vue, according to Bloomberg.

Originally posted on Fleet Financials