SAIC to build electric hybrid car with U.S. parts

SAIC Motor Corp., one of China's biggest state-owned auto makers, is turning to American technology suppliers to engineer a gasoline-electric hybrid car that could go on sale in China as soon as next year.

SAIC is planning to use technology from A123 Systems, a closely held battery maker based in Watertown, Mass., and auto parts maker Delphi Corp., based in Troy, Mich., according to people familiar with the matter.

The new SAIC hybrid vehicle is to be a "mild hybrid" car, much like Honda Motor Co.'s Civic hybrid, with an electric motor to mostly assist the car's gasoline engine rather than propel it.

The planned car represents one of the most serious efforts by Chinese auto makers to dabble in alternative-fuel propulsion technology. There are only a few gasoline-electric hybrids presently available in the Chinese auto market, including Honda's Civic and the Toyota Prius.

SAIC's foray into the hybrid market comes as China encourages its auto industry to shift to electric vehicles and other new-energy cars. China's government believes auto makers could take advantage of the relatively low barriers to entry for electric vehicles -- they are much simpler mechanically than gasoline-fueled cars -- to narrow the gap with bigger foreign rivals and guarantee the Chinese industry's steady long-term growth.

SAIC couldn't be reached for comment late Wednesday. A Delphi spokeswoman didn't immediately respond to an inquiry. An executive at A123 declined to comment.

Immature battery technology has hindered the affordability and practicality of hybrids and other electrified vehicles. Conventional cobalt-based batteries, used primarily in cellphones and laptops, have shown a tendency to overheat, and have caught fire and even exploded in rare cases.

The new SAIC hybrid will be powered by advanced iron-phosphate-based lithium-ion batteries, which have a strong safety record. Iron-phosphate batteries such as those developed by A123 might overheat to the point where they might start smoking, but, proponents of the technology say, they wouldn't catch fire or explode because of the technology's inherent chemical stability.

The SAIC hybrid will also feature Delphi's mild-hybrid vehicle technology, including a hybrid control unit and a unit that converts high-voltage battery power to lower voltages to power an electric motor, said people familiar with the matter.

SAIC, which operates joint car-assembly companies with General Motors Corp. and Volkswagen AG, is responsible for integrating various hybrid systems supplied by Delphi and A123, these individuals said.