Last week in Washington, DC – even as top executives from Ford, Chrysler, and GM asked lawmakers to subsidize the installation of more ethanol pumps at filling stations – makers of new battery systems were letting U.S. senators test-drive prototype cars that get over 100 miles per gallon, but don’t require any new infrastructure.

The vehicles in this road show, which are called plug-in hybrids, were Toyota Priuses retrofitted with large advanced battery packs that can be charged overnight and used to power the cars electrically for short trips. “If you look at how people typically drive cars, about half of the driving that you use gasoline for you could be using the electricity that comes out of your wall,” says Martin Klein, CEO of Electro Energy of Danbury, CT, which developed the battery pack and control system for one of the cars on display in Washington. What’s more, he says, the existing power grid means that “the infrastructure is all in place.”

[Click here for some shots of plug-in hybrids.]

Ordinary hybrids get all their energy from gasoline, but they are much more efficient than conventional cars because extra energy from the engine and braking is stored in a battery pack, which powers an electric motor to boost acceleration and even fuel the car completely for short distances at low speeds. The boost allows hybrid automakers to use a smaller, more efficient internal-combustion engine without sacrificing performance. And hybrids also save gas by turning off their engines when stopped in traffic or at a stoplight. Overall, the fuel economy of a conventional Prius is around 50 miles per gallon.

Plug-in hybrids have a larger battery pack, which allows them to run on the electric motor much longer – for 20-25 miles in the case of the Electro Energy car. The battery is charged from an ordinary electrical outlet. Thus, a commuter who drives 10 or 15 miles to work on city streets could recharge the battery at night and make the commute entirely on electricity. Others would need the gasoline engine at highway speeds, but could rely on the battery while driving in the city. When the energy stored up overnight runs out, the car slips into conventional hybrid mode until the next charge. This gives the vehicle an advantage over all-electric vehicles, which have been hampered by limited range due to limited battery storage capacity.

The retrofitted plug-in hybrid is still far from mass production, however. Mark Verbrugge, director of the Materials and Processes Laboratory at GM, says developing a new kind of car costs about a billion dollars, so automakers want to be sure that it will actually sell. In the past, attempts to introduce electric vehicles have not been commercial successes. The primary concerns about plug-in vehicles include the cost of the system and the safety and lifetime of the large battery packs. Electro Energy’s Klein estimates that the company’s batteries will need to be replaced every five years – well short of the 10 to 15 years automakers think would appeal to consumers.

Electro Energy engineers replaced the nickel-metal hydride battery used in the Prius with a battery using the same chemistry, but assembled in a much simpler, more compact way. Klein estimates that if automakers were to integrate the new batteries into cars from the beginning, the cars would cost about $5,000 more than a conventional car. As it is, the conversion kits will add $5,000 to the cost of a Prius, which already sells for thousands more than a conventional car in the same class. Electro Energy plans to retrofit more demonstration cars in the next 12 months, with the possibility of ramping up production to thousands of units in the following year.

Another company developing plug-in electrics is EnergyCS of Monrovia, CA, which uses lithium-ion batteries developed by Valence Technology of Austin, TX. Lithium-ion batteries currently cost more than nickel-metal hydride ones, but they’re lighter, which could increase efficiency. The company is marketing the system through EDrive Systems of Los Angeles and plans to start retrofitting Priuses for under $12,000. A Toronto company, Hymotion, expects to offer consumers plug-in hybrid kits for a variety of hybrids by later this year; the Prius kit will cost about $9,500.