But the battery requirements for the Volt are much more challenging, requiring the different cell design. Whereas in the Vue power from the battery will be supplemented with power from a gasoline engine, the Volt will rely on batteries full-time. For the first 40 miles of driving, the battery will deliver power from being plugged in overnight. After that, the battery will continue to power the vehicle as it is recharged by an on-board gasoline-powered generator.

The new batteries must pack more energy into a smaller space, the reason for the flat design. But they also need to be fine-tuned for the power demands of the Volt. To do this, engineers can subtly alter the electrode chemistry, thickness, the type of electrolyte, and other aspects of the battery cell design. The collaboration with GM will give A123 direct access to more lab space and testing equipment that could allow A123 to more quickly sort through many subtle variations on the cell design, says David Vieau, A123's CEO. "You never get enough test capacity for all of the different variations you'd like to be able to consider," says Vieau. "We hope this [agreement] will accelerate the process."

Gray says GM hopes to have the batteries in packs within the next couple of months and to have these packs in a generic vehicle platform for testing by the end of the year. The technology could be in a prototype Volt sometime next spring, she says. GM's goal of a production model by 2010 or 2011, Gray says, is an "aggressive target." But the tests they've done so far since announcing the project in January have been encouraging. "We've got no information back that says uh-oh we can't do this," Gray says.

The Volt is going to be about the size of a Chevrolet Cobalt, which currently costs between $14,000 and $20,000 depending on the configuration. Rob Peterson, a GM spokesperson, says GM won't "price themselves out of that class" of vehicles with the Volt. He adds that if GM intended the vehicle to have a hefty premium, it would have made the vehicle a Cadillac. "It was a conscious decision to make it a Chevy," he says.

The agreement with GM does not mean that A123 will be locked out of doing work with other automakers. The specific cell the two companies develop together will be co-owned--so both companies will have to negotiate for how it might be used, Gray says. That could include putting the pack in cars by other companies, Gray says, since "it's in everyone's interest to achieve economies of scale to drive down battery prices." A123 still retains control over its novel battery chemistry, however. Indeed A123 has had discussions with other automakers and its batteries are set to be used in hybrid buses starting in 2008.