GM Planning to Beef Up Production of Hybrids

General Motors Corp. plans to offer hybrid gasoline-electric engines in up to 1 million of its most popular cars, pickup trucks and sport utility vehicles by 2007 -- with California expected to be the biggest market.

The world’s largest automaker also is talking to the Pentagon about building tens of thousands more hybrid vehicles, according to sources who have been briefed about the programs. The armed forces have “a strong appetite for this,” especially because using hybrids in regions like the Middle East would greatly reduce the amount of fuel that military units would have to transport with them in combat areas, said one source.

GM is expected to sell hybrid engines as soon as next year in the company’s best-selling lines -- Chevrolet cars and trucks, Cadillac, Saturn and GMC trucks, sources said.

California is the largest market for low-emission vehicles. Because of its severe air quality problems, California is the only state allowed to set up emission standards that are tougher than those of the federal government.

The state’s stricter rules have forced automakers to invest in expensive pollution-control technologies and sparked wider research into vehicles that run on alternative fuels.

Honda Motor Co. and Toyota Motor Corp. are the only automakers offering hybrid vehicles in the U.S. Hybrids increase fuel economy by using electric motors to boost the output of a small gasoline engine. The two companies have sold about 25,000 hybrids this year.

Some analysts see GM’s plans as acknowledgment that Toyota and Honda have struck a chord with American consumers concerned about dependence on foreign oil.

The five-seat Toyota Prius and Honda Civic hybrids and two-seat Honda Insight all have EPA fuel economy ratings of 45 miles per gallon or better.

GM has spent billions on alternate fuel technologies and sees hybrid motors as a bridge between conventional internal combustion engines and the emission-free fuel cell that use hydrogen to produce electricity to power a car’s electric motor.

GM plans to offer three types of hybrids, sources said, and it will seek federal tax incentives -- Toyota and Honda hybrids each qualify for a $2,000 federal tax deduction, as well as state and local incentives -- to help offset the higher cost of the systems.

GM’s talks with the Pentagon are especially important because military vehicles would use GM’s gasoline-to-hydrogen fuel cell system, as well as the less esoteric gas-electric hybrid systems, providing one of the first widespread uses of fuel cells in passenger and work vehicles.

GM’s discussions with the Defense Department also involve establishment of hydrogen manufacturing and fueling stations on military bases.

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Times staff writer Terril Yue Jones contributed to this report.