GM to name LG Chem for Volt battery: source

DETROIT (Reuters) - General Motors Corp will name a unit of South Korea's LG Chem on Monday as the supplier to provide next-generation batteries for its all-electric Chevrolet Volt, a source close to the negotiations said.

GM Vice Chairman Bob Lutz told reporters on Sunday that the U.S. automaker planned to announce its pick to supply lithium-ion batteries for the Volt plug-in hybrid at the Detroit auto show.

Compact Power Inc, the U.S.-based unit of LG Chem, and a tie-up between Continental AG and A123 Systems have been in the running to provide lithium-ion batteries for the Volt, a highly anticipated, rechargeable car that GM plans to produce in late 2010.

Dick Pacini, a spokesman for Compact Power, declined to confirm whether LG has won the contract. "We are still waiting for an announcement from GM and we're hoping for a positive result," he said.

LG Chem was not immediately available for comment.

The Volt, which is being designed to run 40 miles on battery power alone, has become the centerpiece of GM's attempt to reinvent its product line and focus on developing more fuel-efficient vehicles.

The Volt battery contract has also been closely watched as the first test for an emerging technology expected to generate billions of dollars in sales in the coming decade.

"We are confident that the Volt battery will work and meet its lifetime goals," Lutz said. He declined to name GM's chosen supplier ahead of Monday's announcement.

Two sources with knowledge of the deal had said in October that GM had chosen the LG Chem unit to supply batteries for the Volt and the two companies were discussing the details of a commercial agreement, including how to split warranty costs.

The 400-pound battery pack is expected to be the most expensive element of the rechargeable Volt and its single most important component.

(Editing by Phil Berlowitz)