General Motors Co. chief Fritz Henderson says a new US$43 million plant in Michigan will assemble battery packs for the company's upcoming rechargeable electric car, as the automaker continues relying on suppliers for key elements of the batteries.

GM's president and chief executive held a news conference Thursday morning at the plant site in Brownstown Township, 20 miles (32 kilometres) southwest of Detroit. Production will start in the fourth quarter of 2010, employing about 100 people, GM said.

"Developing and producing advanced batteries is a key step in GM's journey to become the leader in advanced vehicles," Henderson said.

Most automakers are working on similar designs, but GM would offer the first mainstream plug-in with the Chevrolet Volt.

Unlike the Toyota Motor Corp.'s Prius and other traditional hybrids, the Volt can run on batteries alone within a 40-mile (65-kilometre) range. It has a small internal-combustion engine that kicks in after the battery runs out of juice.

The Volt's battery pack can be recharged from a standard home outlet.

South Korea's LG Chem Ltd. is making the lithium ion battery cells, and Henderson said he expects to continue looking outside GM for key technological elements of its battery powered cars.

"We're not a chemical company, so the advanced chemistry of the cells, I don't see us being in that business," he told reporters after the announcement. "We will work with a network of suppliers as they develop alternative chemistry."

The announcement ceremony took on the air of a Michigan pep rally, with Democratic Sens. Carl Levin and Debbie Stabenow, and veteran Democratic U.S. Reps. John Dingell and Sandy Levin touting the plant and the Volt itself as keys to the state's drive to revive its hard-hit economy.

Dingell said the U.S. auto industry is moving to retake the technological lead he said was "stolen" by its overseas rivals.

"We need to tell these foreigners, 'Get out of the way, we're coming through,"' he said, to laughs from the audience.

A 12-year, 50-percent personal property tax abatement from Brownstown was only part of a government support package topping $100 million for GM's electric car program.

Government and industry "are not enemies," Levin said. "This shows what happens when we work together."

The Volt, due in showrooms by November of 2010, will be built at an existing GM factory that straddles the border between Detroit and the enclave of Hamtramck.

GM said this week it expects the $40,000 Volt to get 230 mpg (98 kpl) in the city, based on early tests using draft guidelines from the U.S. Environmental Protection Agency for calculating mileage of extended range electric vehicles.

Henderson said the cost of its electric vehicles will fall with volume and technical progress.