Late last week, A123Systems and General Motors announced that they were forming a partnership in which they will work together to develop cells electric cars, using A123Systems’ nanophosphate battery chemistry.

A123Systems has a background in automotive grade electric batteries and is a leader in the field of nanophosphate cell technology, which offers increased power output and lifespan as well as safer operations when compared to standard lithium ion batteries. Their expertise and experience led to a meeting with President George Bush in February of this year to discuss batteries for plug-in hybrids. Under the terms of this contract, A123Systems and GM will develop battery systems that meet the requirements of GM’s E-Flex system. The E-Flex system was first demonstrated earlier this year in the Chevy Volt. Based on the design of the Chevy Volt, a commuter making a trip of 40 miles per day could virtually eliminate their need for gasoline.

What does this partnership mean for the people on the street? Well, GM expects to have prototype cars going into driving tests by the end of next year, and aims to have them available to consumers by 2010. Considering how unpredictable gas prices are (with the exception of a general upward drift) by 2010 there will likely be a great demand for vehicles that can avoid steep bills at the gas station.

This announcement is yet another step for GM as they work towards rolling out a greener and more fuel efficient product line.