DEARBORN, MI – Continental AG is in a “horse race” with Compact Power Inc. to develop a battery pack for General Motors Corp.’s Volt series hybrid, says Darrin Nowicki, chief engineer-electric drives division.

“They (GM) have not determined who their production supplier is going to be yet,” he tells Ward’s at a technology showcase event here, adding the auto maker may opt for production contracts with both suppliers. “GM is smart enough to want to have more than one supplier for battery packs.”

A supply decision “hopefully will be made before this time next year,” Nowicki adds.

Continental’s system features a unique modular design aimed at alleviating packaging concerns for hybrid-electric vehicle producers.

“The challenges we’ve seen from the OEMs is finding a spot to put the (battery) system,” Nowicki says. “With the exception of the (Toyota) Prius, most of the other vehicles out there are standard vehicles (auto makers are) trying to hybridize. They’re trying to shoehorn a lot of these components into (an existing) system.”

The modular design also allows batteries to be placed in areas where their extra weight won’t affect vehicle driving dynamics, Nowicki says.

The system, which monitors and adjusts the heat and power output of the lithium-ion battery cells being developed by fellow GM supplier A123Systems Inc., can accommodate various hybrids, ranging from 120- to 340-volt systems.

“You can literally just keep adding on pieces to the whole architecture and reuse the same cooling scheme and everything else that we’ve developed,” Nowicki says. “It’s very easy to reuse.”

While Li-ion batteries have been heralded for their greater power density vs. the nickel-metal hydride batteries used in hybrids today, they also have been criticized for their propensity to catch fire or explode when damaged.

But Nowicki says A123Systems’ nanophosphate batteries have proven “amazingly” stable during safety tests, including one in which a large nail is used to puncture the battery cell.

“On some of the older Li-ion technology, you literally would have a catastrophic event,” Nowicki says. “But with the newer technologies, nothing (happens).”

With the battery system nearly complete, the next obstacle is plug-in capability, Nowicki says.

“We’re developing the hybrid-type battery style, so those will be ready (first),” he says. “And then the next stage is to get these cells that have more power capability in them that will be better for plug-in (applications).”

GM expects to be ready with a marketable vehicle utilizing nanophosphate chemistry by 2010, a target date Continental will meet, Nowicki says.

The base system, without plug-in capability, will be featured on two upcoming HEVs from Europe-based auto makers– one in 2008 and the other in 2009, says Nowicki, who declines to reveal the specific makes and models.