GM offers 8-year warranty on Volt battery

General Motors Chairman and Chief Executive Ed Whitacre (C), U.S. Secretary of Energy Steven Chu (3rd L), Michigan Governor Jennifer Granholm (3rd R) and other dignitaries pose by the automakers' first assembled lithium-ion battery for the Chevrolet Volt electric vehicle during a news conference in Brownstown Township, Michigan January 7, 2010.

BROWNSTOWN, Township, Michigan (Reuters) - General Motors Co will offer an eight-year warranty on the battery that powers the Chevrolet Volt electric car it is rolling out starting this year, the automaker said on Wednesday.

GM said it will offer an eight-year, 100,000 mile battery warranty on the Volt, which has an expected 40-mile range when running on electricity stored in its lithium-ion battery.

The battery is the most expensive component of an electric vehicle such as the Volt, which is expected to cost about $40,000 before a $7,500 federal tax credit.

The warranty on the Volt's 400-pound battery will be transferable at no cost to other vehicle owners and cover all of its components, including the 288 cells manufactured by South Korea's LG Chem Ltd.

GM said it hoped the eight-year warranty -- three years longer than the warranty it offers on the engine and transmission of traditional gasoline-powered vehicles -- would reassure consumers about its electric car technology.

"We have the confidence that we can deliver high-quality batteries that are the heart of the Chevrolet Volt," GM product development chief Tom Stephens said on Wednesday.

GM's plant in Brownstown Township, Michigan, near Detroit, has been building pre-production battery packs since January and will begin regular production in August.

The Volt has been the most visible symbol of GM's effort to reinvent itself as a competitor in the market for fuel efficient cars and has featured prominently in GM's marketing during the four years of its development.

GM plans to build 10,000 of the cars in 2011 and about 30,000 in 2012.

A limited number of Volts will be produced in 2010 and offered for sale in a handful of target markets, including California and Washington D.C.

The Volt will enter an increasingly competitive auto segment of partial or fully electric smaller cars in the United States, including Nissan Motor Co Ltd's Leaf electric car, planned for introduction later this year, and Ford Motor Co's Focus electric, planned for the market in 2011.

The Volt will be equipped with a 1.4-liter, four-cylinder engine that will function as a generator for the vehicle's electric drive system when the battery is depleted.

GM hopes that the 300-mile additional range provided by a full tank of gasoline will allay consumer fears about electric vehicles running out of battery power on the road.

Stephens said it was not clear how much replacement battery packs for the Volt would cost once they are no longer covered by warranty. But he said GM expected increased production would bring down battery costs sharply.

"I don't know how much (the cost) will go down over eight years, but I can tell you it will be very significant," he told reporters.

GM's tests have shown that, on average, drivers should be able to count on a 40-mile all-electric range from the Volt's liquid-cooled and heated battery pack, Stephens said. But he added that all-electric range would decline in extremely hot and cold conditions.

Over time, the power available from the Volt's battery pack will decline gradually giving the vehicle a shorter all-electric range.

But he said GM's testing showed the degradation of the Volt battery would be gradual and it should provide at least 28-miles of all electric driving even after 10 years -- 70 percent of its original capacity.

"It's not like you've got to run and change it right away. It's really quite robust," he said of the Volt's battery.

(Additional reporting by David Bailey and Bernie Woodall, editing by Gerald E. McCormick and Andre Grenon)