GM starts work on $43m Volt battery plant

General Motors last week became the first US auto manufacturer to begin work on its own electric car battery plant as it continues to lay the groundwork for next year's launch of its Chevy Volt plug-in hybrid.

The company announced that it is to invest $43m (£26m) to lease and renovate a new factory in Browntown, Michigan that will be dedicated to manufacturing Lithium-ion batteries for the Volt and future GM plug-in hybrids.

Installation of new equipment at the site is already under way and GM said production will begin during the fourth quarter of next year, in time for the scheduled launch of the Volt in late 2010.

Rival firms such as Chrysler, Ford and Daimler have to date partnered with battery manufacturers to support their electric car development projects, but Fritz Henderson, GM president and chief executive, said having battery manufacturing capabilities in-house was central to the company's strategy of developing a more fuel-efficient fleet of vehicles.

"Developing and producing advanced batteries is a key step in GM's journey to become the leader in electric vehicles," he said. "This state-of-the-art battery manufacturing site reinforces our commitment to achieve that goal and to deliver clean, fuel-efficient vehicles to our customers."

The new plant also underlines the scale of the expectations surrounding the Volt. GM has said it plans to manufacture just 10,000 cars in the first year of production, but the 160,000-square-foot Brownstown facility reportedly has capacity to produce 70,000 battery packs a year and GM is betting on the Volt ultimately shifting upwards of 60,000 units a year.

The announcement of the new facility also comes just days after GM released fresh details about the Volt's expected performance, claiming that the car will be able to travel 40 miles on one full battery charge before switching to the conventional engine. The company said that as a result, the Volt will boast fuel-efficiency metrics of 230 miles per gallon for city driving.