Scott Malone writing for Reuters reported that General Electric Co is stepping up its investment in developing new battery technologies for autos as it looks to increase its role in electrifying cars -- one of the key strategies to boost fuel efficiency and reduce carbon dioxide emissions.

The U.S. conglomerate is working with U.S. automaker Chrysler to secure government funding to develop a system to electrify larger passenger vehicles and has raised its investment in A123 Systems Inc, which makes batteries for cars and electric devices, to $55 million.

"The trend toward electrification is pressing and inevitable," said Mark Little, senior vice president and director of GE's global research center in Niskayuna, New York.

GE and Chrysler are teaming up to develop plug-in hybrid electric cars that use two batteries -- lithium-ion, which GE researchers said is better-suited for creating short bursts of power when starting a car -- and another using sodium-metal halide technology, which GE contends is preferable for producing long-term, steady power, like at cruising speed.

The conglomerate and the automaker are seeking $10 million in funding from the U.S. Department of Energy to develop the system, GE officials said. If the funding is approved, the two companies would match it.

Lithium-ion batteries, common in small consumer electronics like cell phones and laptop computers, are what automakers are focusing on for the next generation of electric vehicles, including General Motors Corp's upcoming all-electric Chevrolet Volt and Mercedes-Benz's planned S-Class hybrid. The current generation of hybrids on the road, including Toyota Motor Corp's Prius, rely on nickel-metal batteries that are larger and heavier than the lithium-ion variety.

GE developed sodium-metal halide batteries for its hybrid railroad locomotives.

COST A KEY CHALLENGE

The slowing world economy poses a challenge to the drive to shift cars from burning fossil fuels towards relying on electric power, which would reduce their emissions of carbon dioxide, a key greenhouse gas associated with climate change.

Recession fears have taken oil and gasoline prices down from summertime record highs -- easing pressure that had pushed consumer interest in electric cars and hybrids.

Hybrids have already grown to represent 3 percent of the $500 billion U.S. new-vehicle market in 2007, largely due to buyers who are willing to pay a premium for them.

"Take a look at the million or so hybrid vehicles on the road today. A lot of those don't have a positive economic impact," said Craig Irwin, a Merriam Curhan Ford analyst focusing on clean energy and batteries. "Consumers are buying these vehicles because it reduces their carbon footprint ... That's fairly strong evidence that the consumer will be there for technology that makes a difference if there's a minor input for them on the economic side."

It will take a change in the cost of buying or operating traditional gasoline and diesel cars and trucks for demand for hybrids and electric vehicles to really take off, which would happen if governments stepped up their efforts to tax carbon emissions, executives said.

"Is battery cost ever going to compete with today's diesel and gasoline vehicles? I'm guessing the answer there is no," admitted Tim Richter, a hybrid systems engineer for GE. "What does it take for the current cost of today's vehicles to rise up? Carbon is clearly going to be key a piece of that ... You'll have that crossover and I think electric will win. It's a matter of timing."