GM keeps electric dreams alive despite bankruptcy threat

While one hand might be holding out a cap to the US government for emergency funding, GM is still throwing substantial piles of cash at sustainable motoring projects with the other.

This week the head of GM's flagship Chevrolet brand announced that the car maker is planning to invest up to $30m (£21.6m) in a facility to construct power packs for its new Chevrolet Volt plug-in hybrid range.

The facility, which according to GM will be the first Lithium-ion battery pack manufacturing plant to be owned by an automaker in the US, will assemble battery cells manufactured by South Korea's LG Chem.

Providing it is given the go-ahead from state and local government, the plant will be built in Michigan, and should be operational by 2010.

The Chevrolet Volt is the centrepiece of GM's attempts to catch up with the likes of the Toyota Prius as the company tries to present itself as savvy to the need for more environmentally sustainable vehicles, both to attract more customers and secure government funding to stave off the threat of bankruptcy.

The car is expected to reach showrooms late next year and will offer drivers about 40 miles of motoring using the battery before switching to a conventional engine.

"We chose Chevy because we cannot be niche with the Volt. We have to make it a mass-production vehicle," Ed Peper, North American vice president of GM's Chevrolet brand, told news agency Reuters.

The US Treasury has pledged about $13.4bn to the ailing car maker in three separate payments, the second of which was sent this week.

GM has admitted that if it had not received the second installment of $5.4bn, it would have run out of cash and faced bankruptcy. As a condition of the emergency funding, GM will have to submit a restructuring plan to Congress next month to coincide with the third and final payment. The Obama administration is expected to make a commitment to developing more fuel-efficient vehicles a condition of the loan being granted.

GM has said that the Volt represents just one of a number of green car technologies that it is pursuing, including advanced gasoline, diesel and biofuel technology, as well as electrically assisted vehicles and hydrogen fuel cells.