Chrysler has announced today that it has signed an agreement with American battery supplier A123Systems for new nanophosphate lithium-ion batteries for its future generation of plug-in hybrid and all-electric vehicles. A123Systems plans to open a new manufacturing facility in Michigan, and via this deal both companies are reinforcing their commitment to keeping the future development of electric mobility in the United States.

Chrysler’s first electric vehicle is due to go on sale next year and will eventually be followed by a range of plug-in hybrid or range-extended vehicles based on the recently revealed Dodge Circuit EV, Jeep Wrangler EV, Jeep Patriot EV, Chrysler Town & Country EV, and the Chrysler 200C EV concept cars.

All the vehicles will feature the same modular battery set-up, only on a different scale depending on the application, and this should help Chrysler reduce development time, investment, and overall battery system costs.

Like the upcoming Chevrolet Volt, Chrysler’s range-extended vehicles will use a compact internal combustion engine to top up the batteries which then power an electric motor to drive the wheels. This is in contrast to conventional hybrids, which use the engine to drive the wheels and the electric motor to assist in high load situations or drive the car at low speeds.