GM, utility group to announce electric car tie-up

DETROIT (Reuters) - General Motors Corp GM.N and an organization representing U.S. utilities are set to announce a partnership to prepare for the widespread sale of plug-in electric cars, people familiar with the plans said Friday.

GM and the Electric Power Research Institute will announce the tie-up next week at an event in San Jose, California, to promote rechargeable electric vehicles like the upcoming Chevrolet Volt, those briefed on the plans said.

The tie-up would mark the second between a major U.S. automaker and EPRI, which conducts research for the electric power industry and represents utilities that generate more than 90 percent of the power in the United States.

Representatives of GM and EPRI both declined comment.

The announcement would come as GM prepares to unveil the production version of the all-electric Volt, the most visible symbol of the automaker's attempt to break its association with gas-guzzlers like the Hummer brand it is now looking to sell.

GM is designing the Volt, which is expected to go into production in 2010, to run for 40 miles on a lithium-ion battery pack that can be recharged at a standard electric outlet.

The Volt will also capture energy from braking, like a traditional hybrid, and feature an on-board engine that will kick in to recharge its battery pack on longer trips.

GM plans to begin building the Volt in late 2010 at a Detroit factory and is expected to show off the production design for the car and name a battery supplier for its key component in the coming weeks.

While GM executives have said they are satisfied that the Volt can deliver the gasoline-free range the automaker has targeted, the roll-out of thousands of electric vehicles poses still-unresolved issues for utilities.

Automakers have said the adoption of the electric cars would be speeded if electric utilities would set up recharging stations and allow them to send power back to the grid from parked cars to reduce operating costs.

Auto executives have also suggested the utilities could create a market for recycled but still-powerful lithium-ion battery packs from older electric cars.

Those batteries could be stitched together to store energy for peak demand periods, a secondary market that could bring down the initial cost of plug-in vehicles.

For their part, the utilities stand to gain revenue as consumers turn to the grid rather than the gas station as the source of power for cars, analysts have said.

GM, like other major automakers, has been criticized for killing an earlier electric car program in California, and one advocate of the technology said GM realizes that it needs allies now to get the product right the second time round.

"GM was unsuccessful in the commercialization of electric cars before for reasons that remain controversial," said Felix Kramer, founder of CalCars, a nonprofit group that promotes plug-ins. "This time, they realize they need partners."

GM's rival Ford Motor Co (F.N) announced its own partnership with EPRI in March.

The No. 2 U.S. automaker has been working with Edison International (EIX.N) unit Southern California Edison for a year in a joint study involving plug-in versions of Ford's Escape hybrid.

For GM, which this week pledged to cut $10 billion in costs to free up cash and reassure investors, the Volt represents an increasingly important demonstration that the automaker can compete with the likes of Toyota Motor Corp (7203.T) on fuel efficiency.

"The big paradigm shift, the revolutionary vehicle for GM, will have to wait until 2010 with the Chevrolet Volt," said Jesse Toprak, an industry analyst with Edmunds.com "Anything between now and then will just be little bumps on the road."

GM's plans for the Volt got a boost on Friday when Republican presidential candidate John McCain visited the GM center designing the car and said Americans who buy one should be able to receive a $5,000 tax credit.

"The eyes of the world are now on the Volt," McCain told GM employees gathered around him in a campaign town hall meeting.

(Additional reporting by David Bailey, editing by Gerald E. McCormick)