But when the four-door family sedan hits showrooms late next year, its efficiency will come with a steep sticker price: US$40,000.

Still, the Volt's fuel efficiency in the city would be four times more than the popular Toyota Prius hybrid, the most efficient car now sold in the US.

Most automakers are working on similar designs, but GM would offer the first mainstream plug-in with the Volt, which seats four and was introduced at the 2007 Detroit auto show.

Growing fleet of cars

The Volt will join a growing fleet of cars and trucks powered by systems other than internal combustion engines.

Unlike the Prius and other traditional hybrids, the Volt is powered by an electric motor and a battery pack with a 40-mile (64-kilometre) range.

After that, a small internal combustion engine kicks in to generate electricity for a total range of 300 miles (482 kilometres).

The battery pack can be re-charged from a standard home outlet.

GM CEO Fritz Henderson said at a news conference Thursday that a new US$43 million plant in Michigan would assemble the battery packs for the electric car.

Production will begin at the plant southwest of Detroit in the fourth quarter of 2010, employing about 100 people, GM said.

Hybrids use a small internal combustion engine combined with a high-powered battery to boost fuel efficiency.

Toyota's Prius, for example, gets 51 mpg (21.68 kpl) in the city and 48 mpg (20.41 kpl) on the highway.

Edmunds.com, an auto website, cast doubt on whether drivers can expect 230 mpg (98 kpl) from the Volt since fuel efficiency also depends on driving style.

Volt drivers who cruise sensibly on smooth roads without much cargo - and who avoid exceeding 20 miles (32 kilometres) or 30 miles (48 kilometers) between charges - might fill up only rarely. But "for most people, it is not realistic to expect that kind of mileage in real-world driving," said Michelle Krebs, a senior analyst with the website.

General Motors is touting the 230 mpg (98 kpl) figure following early tests that used draft guidelines from the Environmental Protection Agency for calculating the mileage of extended-range electric vehicles.

The EPA guidelines, developed with help from automakers, figure that cars such as the Volt will travel more on straight electricity in the city than on the highway.

The agency said in a statement Tuesday that it has not tested a Volt "and therefore cannot confirm the fuel economy values claimed by GM."

- AP