GM: Deal could put it in lead in electric car race

General Motors gm has signed an agreement with a battery maker that could propel it ahead of Toyota Motor tm in the race to bring plug-in hybrid and electric cars to market, a top company official said Thursday.

A123 Systems, based in Watertown, Mass., already produces thousands of nanophosphate lithium-ion batteries for use in cordless power tools, and it plans to apply the technology to automobiles.

GM Vice Chairman Bob Lutz said the deal, coupled with a published report that Toyota would delay launches of lithium-ion battery powered hybrids for up to two years, could give GM the lead in bringing the new clean technology to market.

"I think that our No. 1 competitor has some problems with their technology, and I do think that it very definitely opens a window of opportunity for us to be first to market with a genuine plug-in hybrid," Lutz said at an automotive industry conference in Traverse City where the battery deal was announced.

The Wall Street Journal, citing people familiar with Toyota strategy that it didn't name, reported Thursday that problems with lithium-ion technology forced Toyota to back away from plans to roll out the vehicles between 2008 and 2010. Toyota's current hybrids use nickel-metal-hydride batteries.

A message seeking comment was left Thursday with Toyota.

Lutz said the lithium-ion battery being discussed by GM is different than one that Toyota would use.

Lutz also is hoping to be first to market with a pure electric vehicle that has a piston engine as an emergency backup, similar to the Chevrolet Volt prototype that the company unveiled at the North American International Auto Show in Detroit in January.

A123 expects to have the batteries, which would be flat and similar in appearance to those that power cellphones, ready for GM to test in vehicles by October. GM still hopes to have an electric car on the market by 2010.