General Motors Corp. took another step yesterday in its quest to develop a car that will be able to travel as far as 40 miles a day on a single electric charge.

GM said it signed a contract with battery maker A123Systems Inc. to develop lithium ion batteries specifically designed to power the Volt plug-in hybrid vehicles that GM hopes to put on the market in the next few years.

The battery technology used by A123Systems is potentially safer, cheaper and more durable than other designs being tested, the automaker said, which would give GM a boost over Toyota Motor Corp. and other rivals in the race to produce a viable plug-in car for the United States.

GM said it expected to start road-testing prototype vehicles powered by A123Systems' lithium ion batteries by the end of this year or in early 2008.

Cars equipped with the batteries could be in commercial production by the end of 2010, GM Vice Chairman Bob Lutz told an industry conference yesterday, although the company noted that this previously announced timetable was dependent on the development of a suitable battery.

The contract with A123Systems "should significantly accelerate commercial release of the Volt," said Michael Millikin, editor of Green Car Congress, an online site that tracks developments in eco-friendly transportation technologies.

GM unveiled a Volt prototype in January. If the battery challenges can be overcome, the automaker expects the car to travel up to 40 miles on electric power alone, at which point a small gasoline motor would take over and recharge the battery.

The 40-mile range is important because GM believes it would allow most Americans to do their daily driving without burning a single gallon of gas. The batteries are recharged at night by plugging the car into a home outlet.

If GM succeeds in getting the Volt or something similar in showrooms before its rivals, it would be a major coup for the company whose "green" credentials are somewhat tarnished.

Last year's documentary film "Who Killed the Electric Car?," which chronicled California's efforts to promote the use of electric vehicles in 1990s, portrayed GM and the fate of its EV1 electric car, which GM decided to stop producing, in a less than favorable light.

Current gas-electric hybrids use nickel-metal-hydride batteries to run an electric motor that works in tandem with the car's gasoline engine.

Carmakers have settled on lithium ion batteries for plug-in hybrids because they pack more power into a smaller space, providing a significant electric-only range. But traditional lithium ion batteries have had over-heating problems, causing fires in laptop computers.