From GM:

GM and A123Systems to Co-Develop Lithium-Ion Battery Cell for Chevrolet Volt Agreement Speeds Up Development of Chevy Volts Innovative Propulsion System

“Breakthrough battery technology will drive future automotive propulsion, and the company that aligns with the best strategic partners will win. That’s what is so significant about this deal,” said Bob Lutz, GM vice chairman of Global Product Development. “Whether you’re talking about the Chevy Volt, a fuel cell or even a plug-in hybrid such as our planned Saturn Vue, we need to understand the fundamental battery cell performance.”

The contract calls for A123Systems, of Watertown, Mass., to develop battery cells to meet the specific requirements of GM’s E-Flex system. A123Systems is considered a forerunner in the development of nano phosphate-based cell technology, which, compared to other lithium-ion battery chemistries, provides higher power output, longer life, and safer operations over the term of the battery.

The E-Flex electric vehicle architecture was first shown in the Chevy Volt concept car revealed earlier this year. For average commuters driving 40 miles, the Chevy Volt will use zero gasoline and produce zero emissions and could nearly eliminate going to the gas station altogether.

“The Chevy Volt will lead the automotive industry in a new direction,” Lutz said. “We see a future where vehicles run on electricity and are equipped with intelligent ways of making electricity on board, making us less dependent on gasoline. It’s the next great paradigm shift in our industry, an opportunity mainly due to the rapid advancement in battery cell technology by companies such as A123Systems and LG Chem.”

Earlier this year, GM awarded two contracts for advanced development of battery packs. These battery packs require the integration of multiple battery cells, to Compact Power, Inc., a subsidiary of Korean battery manufacturer LG Chem, based in Troy, Mich.; and Frankfurt, Germany-based Continental Automotive Systems, a division of Continental A.G., a tier one automotive supplier. Under these agreements, one contract was awarded to CPI, which will use battery cells developed by parent company LG Chem. A separate contract was issued to Continental, which will use the cells being co-developed by GM and A123Systems.

“A123Systems and LG Chem are both top-tier battery suppliers, with proven technologies,” said Denise Gray, director of GM’s Energy Storage Devices and Strategies. “Were confident one, or possibly both of these companies solutions will meet our battery requirements for the E-Flex system.”

Dave Vieau, A123Systems chief executive officer, said this type of battery would be advantageous in other transportation industries as well.

“Were talking today about the Volt and implications that it will have on the electrification of passenger vehicles, but the technology goes a lot further than that,” Vieau said. “The weight, size, safety and performance of these batteries have implications on all transportation, including hybrid buses, trucks, and aircraft.”

A123Systems currently manufactures over ten million cells annually making it the world’s largest producer of batteries with nano phosphate chemistry. Most of these cells are used in rechargeable power tools.

The co-development of this battery technology is the latest step in GMs efforts to diversify the transportation away from petroleum with a range of alternatives.

These include:

A diverse lineup of hybrid models is now in production, the GM diesel-electric hybrid system for large city buses, the Saturn Vue and Saturn Aura Green Line hybrid models and the all-new Chevy Malibu hybrid. Coming this fall, the Chevrolet Tahoe, and GMC Yukon Hybrid SUVs feature the world’s first 2-Mode hybrid system in an SUV, providing up to a 40-percent improvement in city driving fuel economy to what is already the industry’s most fuel-efficient full-size SUVs. Due next year is a front-wheel-drive 2-Mode hybrid Saturn Vue Green Line, with plans to make a plug-in version of the Vue that has the potential to achieve double the fuel efficiency of any current GM SUV.

GM is also a leading producer of E-85 capable bio-fuel vehicles, with more than two million on the road. Additionally, GM provides more vehicles that achieve 30 mpg highway than any other manufacturer in the U.S. market. GM is also the first automotive member to join the U.S. Climate Action Partnership (USCAP), a group of global companies and non-governmental organizations formed to support an economy-wide, market-driven approach to reducing carbon emissions.