LOS ANGELES – General Motors Corp. will tap the Saturn Vue as its first, and perhaps the industry’s first, production plug-in hybrid-electric vehicle, as the auto maker says it is committed to transitioning from mechanically driven to electrically powered vehicles.

GM Chairman and CEO Rick Wagoner kicks off the energy-conscious L.A. Auto Show with the announcement. But he notes production of the PHEV largely depends on advancement of battery technology.

“The technological hurdles are real, but we believe they’re surmountable,” Wagoner says. “I can’t give you a date certain at this point for a plug-in hybrid, but I can tell you that this is a top priority program for General Motors.”

The PHEV Vue is unlikely to appear before 2009, insiders tell Ward’s.

Wagoner says the auto maker is working closely with several battery suppliers to improve energy capability.

GM will build the PHEV off its Two Mode hybrid system, which the auto maker co-developed with Chrysler Group and BMW AG. The PHEV system is expected to boost fuel economy at least 45% over the traditional internal combustion engine Vue, Wagoner says.

Wagoner also announces the ’08 Vue will be GM’s first front-drive hybrid equipped with the Two Mode system. The Two Mode Vue will sell alongside the Vue Green Line, or “mild hybrid,” model.

GM plans to roll out Two Mode versions of the Chevrolet Tahoe and GMC Yukon as ’07 models. In addition, GM’s entire Hummer line, which includes the H2, H3 and an eventual H4 model, will be capable of running on biofuels, such as ethanol, within the next three years, Wagoner says.

Troy Clarke, president GM-North America, tells Ward’s the PHEV Vue is expected to achieve 70 mpg (3.3 L/100 km).

“We’re committed to do it; we’re going to do it as quickly as we can,” Clarke says. “We’re currently assessing the right battery technology. We’d love to have lithium-ion technology. But if that doesn’t work or isn’t going to be out there for a couple of years, then we’re going to have to do something closer in.”

Li-ion batteries hold the promise of longer life and lighter weight vs. nickel-metal-hydride batteries currently found in most HEVs. But Li-ion batteries, used in laptop computers and other electronics, have exhibited overheating problems.

GM, which is trying to polish its environmental image, is in a PHEV race with Toyota Motor Corp. and Nissan Motor Co. Ltd. Nissan plans to have a PHEV model ready by 2010.

“Of course it’s great to be first, but we also want to have the best (technology) and bring the best manufacturing practices to this,” Wagoner tells Ward’s.

By 2030, Wagoner says, the world’s energy appetite will increase by 70% from 2003.

“For the global industry, this means we must, as a business necessity, develop alternative sources of propulsion based on alternative sources of energy in order to meet the world’s growing demand for our products,” Wagoner says.

“The key to all this, as we see it at GM, is energy diversity,” Wagoner says. “We believe the best way to power the automobile in the years to come is to do so with many different sources of energy.”

scanderson@wardsauto.com