General Motors said today that it has awarded two development contracts for the lithium ion battery in the e-flex propulsion system to be used in its Chevrolet Volt plug-in hybrid.

The proposals of Compact Power Inc. and Continental Automotive Systems were chosen from 13 submitted, GM officials said today. The contracts were announced at GM’s annual shareholders’ meeting in Wilmington, Del.

Rob Peterson, GM's manager of powertrain communications, would not reveal the value of the deals. One or both of the suppliers may eventually receive a production contract, he said.

“Both of them have offered uniquely different solutions for pack integration and for cell development,” Peterson said. “We’re looking for solutions.

“It doesn’t make sense to throw all of our eggs into one basket. We want to see what LG Chem (Compact Power’s parent company) has to offer and what Continental has to offer.”

Compact Power, of suburban Detroit, is headed by former Ford Motor Co. engineering veteran Prabhakar Patil. The company will develop and test the battery cell/module -- the battery pack and in-car integration -- during a 12-month development program that begins immediately. The cells will be developed by LG Chem, a Korean battery manufacturer.

Continental will work with GM to develop lithium batteries that it plans to use in a production vehicle next year. It will use cells provided by A123 Systems, of Watertown, Mass.

The Volt could be ready by 2010 if suppliers produce a reliable lithium ion battery, GM Vice Chairman Bob Lutz has said.

Executives from both suppliers have said the lithium ion battery will be integral to the automotive industry’s future.

“It is absolutely clear that lithium ion is the next thing,” Karl-Thomas Neumann, Continental's executive board member responsible for the automotive systems unit, told Automotive News Europe in March. “We don't know what comes after lithium ion, but in our plans, lithium ion will be the name of the game.

“All the other batteries are going to disappear because the advantages of lithium ion are so big.”

Said Patil in a statement: “This development contract further vindicates that lithium ion is the preferred battery technology for the automotive industry.”

Continental Automotive, of Frankfurt, is a subsidiary of Continental AG -- which ranks No. 12 on the Automotive News list of the top 100 global suppliers, with worldwide original-equipment automotive parts sales of $11.45 billion in 2006.

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