General Motors (GM) recently announced that it is developing two types of plug-in hybrid vehicles, cars designed to run exclusively or almost exclusively on electricity for daily commutes. (See “GM’s New Electric Vehicle” and “GM’s Plug-In Hybrid.”) But the announcements came with this caveat: the battery technology isn’t ready, and production will have to wait. In reality, the battery technology is actually quite close to being ready.

Indeed, GM’s vehicle chief engineer, Nick Zielenski, says that individual batteries are already good enough. “We’ve got enough data at the cell level to feel that the technology is there,” he says. What remains to be done is packaging the cells into large battery packs and testing them in actual vehicles. This will be a challenge, Zielenski says, since there is a big difference between using “a single cell and multiplying them all together to get the energy levels that we need for this type of vehicle.” But according to development contracts GM recently signed with two groups of companies, such battery packs will be ready for testing in vehicles by the end of this year.

Making batteries for vehicles, especially plug-in hybrids, is very challenging. For accelerating and climbing hills, the battery pack has to deliver enough power to supply the electricity demand of several houses at once. The energy storage capacity required to give a vehicle a 40-mile range would be enough to power a laptop in continuous use for weeks. Yet the space on board for such a battery pack is limited. “What we need is a very reliable and long-lived battery that has also got quite high energy density so we can find a place for it in the car,” says Peter Savagian, director of hybrid power-train systems at GM.

Developers also need to make packs that can survive extremes in temperature and constant vibrations on the road, and still last the life of a vehicle. And they have to make the batteries safe. Last year millions of laptops were recalled because of the danger of their batteries bursting into flame. A plug-in hybrid would have the equivalent of hundreds of laptop battery packs bundled together.

Remarkably, at the level of individual cells, many of these problems have already been addressed. Lithium-ion batteries have much higher capacity than the lead acid batteries used in electric cars in the past, and even more than the nickel-metal hydride used in hybrids today. According to GM, its new Chevrolet Volt concept vehicle stores the same amount of energy as the company’s EV-1 electric vehicle, but in just one-third the area. And while lead acid battery packs have to be replaced every couple of years, new lithium-ion batteries seem from lab tests to be able to last 10 years or more.

New lithium-ion batteries are also safer and less expensive than those in a laptop. One of the companies under contract with GM to develop battery packs is A123 Systems, based in Watertown, MA. It has developed a nanostructured iron phosphate­-­based electrode that is much safer than the cobalt-oxide laptop batteries that were recalled last year. For example, while a cobalt-oxide battery will burst into flame if punctured by a nail, the A123 battery merely releases innocuous wisps of steam. (See “Safer Lithium-Ion Batteries.”) A123 is already producing millions of its batteries for use in professional power tools, and now it has developed a new, larger cell designed to be more rugged and hold more energy. The company has also modified the electrolyte to make the battery able to operate very well at -20 ˚F or temperatures up to 140 ˚F. As a result, “the car can operate in Scandinavia, in Patagonia, or in the summer in the middle of a tropical city,” says Ric Fulop, cofounder and vice president of business development at A123 Systems.

At this point, cost may still be an issue. But that will change as more of the cells get made. “At the end of the day, it’s a scale game,” says Alan Mumby, CEO of a joint venture between Johnson Controls, in Milwaukee, WI, and Saft, in Paris, France. The venture has been awarded one of the two contracts for developing battery packs for GM .

Overall, “the fundamental tool kit–the weight, volumetric efficiency, the demonstration of life in a lab basis, and safety through extensive testing–have all

been demonstrated,” says David Vieau, president and CEO of A123 Systems. “So this is not a pie in the sky. However, the actual execution of all functionality in cells in actual vehicles hasn’t been done.”

Although integrating the batteries into large packs is a challenge, in fact it has been done before. According to Scott Lindholm, vice president of systems engineering at Cobasys, based in Orion, MI, which is teaming with A123 Systems on the GM contract to develop battery packs, many of the problems involved in making lithium-ion battery packs are similar to those the company has already solved for the nickel-metal hydride packs it already produces for GM hybrids. What’s more, several companies have already made large lithium-ion battery packs for vehicles. For example, Hymotion, based in Ontario, has used A123’s power-tool batteries to make kits for converting the Toyota Prius into a plug-in hybrid. Indeed, its design is one of the contenders for converting hundreds of New York State’s government-owned hybrids into plug-in hybrids. These packs are smaller than that used in GM’s Volt concept vehicle, but companies such as Tesla Motors have already successfully engineered lithium-ion packs that are a few times larger than GM’s pack.

The question is whether such packs can be engineered to have the life, safety, and cost that GM wants. As it is, these battery packs can cost tens of thousands of dollars, placing them out of the range of most consumers. But part of the cost has to do with scale, and that should change if GM puts the vehicle into production. The price is also coming down as the batteries are used in other applications, such as power tools.

In all, it seems as though battery technology is falling into place, just as demand for more fuel-efficient cars is rising. “It’s really exciting for us to be in this business,” says Fulop. “The timing ended up quite nice. We developed these products, and the plug-in-hybrid thing is really happening.”