GM has reached another milestone with the development of its upcoming Chevrolet Volt plug-in hybrid. Vice Chairman Bob Lutz revealed earlier this week that prototype versions, which started real-world testing only last month, have already reached the target electric-only driving range of 40 miles. The latest announcement comes only a month after GM confirmed that it had finalized the design of the production Volt and makes us confident engineers will be able to meet the 2010 deadline.

Engineers are using previous generation Malibu sedan bodies as camouflage for the new Volt prototypes but as revealed in a leaked video from within GM’s Michigan development center the production Volt will feature a more conventional sedan body with a much more streamlined design than the original concept.

Speaking with Edmunds, Lutz said that this was the first time the prototype was running on electric power alone and that it was reliably meeting its objectives with rough calibration, the wrong drive unit and the wrong body.

The new Volt features an electric drivetrain powered by advanced lithium-ion batteries. The final version is expected to have a driving range of 40 miles on electric power alone as well as an internal combustion engine running on petrol, diesel or ethanol-blended fuel - depending on which markets it sold in - to top up the batteries.

GM’s closest competitor Toyota is already developing a plug-in hybrid but there are no firm details or reports about the progress of the car.