General Motors Co said on Thursday it would invest $43 million to create a plant in Michigan where it will build lithium-ion battery packs for its Chevrolet Volt and other electric vehicles.

Developing and producing advanced batteries is a key step in GM's journey to become the leader in electric vehicles, GM's Chief Executive Fritz Henderson said in announcing the plans for the first U.S. battery pack plant that will be operated by a major automaker.

The company is leasing the building. Once the plant is fully operational, it will be able to produce 70,000 battery packs per year, GM said.

GM hopes to start production in the fourth quarter of 2010 to support its Volt plug-in car, expected to be launched later that year. The battery pack for the Volt weighs 400 pounds.

On Tuesday, GM said the Volt is expected to get an unprecedented 230 miles per gallon in city driving.

GM is trying to revamp its product line, which has been criticized for lacking fuel efficient vehicles. The company emerged from bankruptcy in July.

Last week, the Obama administration awarded GM $105 million in grants through the government's $2.4 billion package to support development of next-generation batteries and electric vehicles.

The Volt is on track to become the first mass-market, plug- in hybrid in the United States when it is launched at the end of 2010. It is designed to run for 40 miles on a single battery charge, and can be recharged overnight at a standard electric outlet.

When the battery is partly depleted, a small combustion kicks in to recharge it and power the vehicle.

LG Chem will make battery cells for the Volt at its plant in South Korea. The cells will be shipped to the GM battery plant in Michigan and built into a T-shaped battery pack.

GM expects to manufacture 10,000 Volt cars in its first 12 months of production, ultimately increasing that to 60,000 a year.