General Motors has announced two new battery technology deals that will enable it to build a sports utility vehicle that could achieve economy ratings in the region of 70mpg. The deals revolve around lithion-ion batteries, which can hold twice as much capacity as the nickel-metal hydride batteries on the market today. This would allow companies to build plug-in hybrids that rely on the national electricity grid more than imported crude oil.

Lithium-ion batteries are already in common use in notebooks and mobile phones, but mating them to a car engine that also has the ability to run on petrol has been difficult. The two companies GM has signed deals with are specialists in li-ion battery research, a newspaper report confirms.

GM expects the two companies to develop battery models that will allow it to produce concept cars by the end of the year. A GM plug-in hybrid could be as close as 2010, but the carmaker plans to have 12 hybrid models in its lineup by the end of 2008 to help fight back against Toyota.

Tesla motors has already been working on the Tesla Roadster, which uses 6,831 lithium-ion cells in a tamper-resistant enclosure as its power source. The difference here is that the Tesla roadster relies solely on battery power, while GM's vehicles will be able to use petrol as well. Pictured above is the Saturn Vue Green Line hybrid SUV, which will be available as a 2008 model.