Image: Electric car prototype
Vincent Thian  /  AP
An engineer from Detroit Electric shows a prototype of Proton Electric car at the Proton test circuit in Shah Alam, Malaysia, last September.
updated 3/30/2009 12:07:18 PM ET 2009-03-30T16:07:18

Malaysia's national car maker Proton and a Dutch company signed a $555 million deal Monday to make zero emission electric cars that they said would be more powerful than any existing model.

Proton and Detroit Electric, a startup company that owns the technology, signed the agreement in the presence of Malaysian Prime Minister Abdullah Ahmad Badawi to produce the sedan cars, initially targeted for Europe and the U.S.

"We have the audacity to bring to the people an affordable, practical, everyday car ... with zero emission," Detroit Electric Holdings Ltd. Chief Executive Albert Lam said in a speech.

The four-door vehicle will roll out of Proton's factory by early next year, Lam told The Associated Press in an interview.

The aim is to produce 40,000 units in the first year, ramping up to 270,000 by 2013, he said. The cars will be priced between $23,000 and $33,000, depending on the model and taxation.

Under the agreement, Detroit Electric will use Proton's underutilized assembly line. Detroit Electric's motor, lithium polymer battery, the drive train and other components will be fitted in the bodies of two Proton models, Persona and Gen 2. They will be sold as Detroit Electric, without a specific brand name.

First to mass market?
If it succeeds, Detroit Electric would be among the first to mass-produce an electric car driven purely by a noiseless battery-powered motor, unlike current hybrid engines that combine gasoline engines and electric motors.

General Motors Corp., Toyota Motor Corp., Ford Motor Co., PSA Peugeot-Citroen, Mitsubishi Motors Corp. and Tesla Motors are all seeking to develop electric cars market amid rising consumer interest in "green" technologies — and at a particularly difficult time for the industry amid the global slowdown.

U.S.-based Tesla Motors has a prototype that has a claimed range of 160 miles and is scheduled to be produced by 2011, and cost about $50,000. A Peugeot-Mitsubishi collaboration, the iMiEV hatchback, expected to reach European consumers next year, has a stated range of 90 miles.

Lam said Detroit Electric's base model, meant for city driving, will have a range of 150 miles  on a full charge of eight to 10 hours and will have a top speed of 120 miles per hour.

The higher model will have a range of 200 miles with a top speed of 120 miles per hour. Plugging the car to an ordinary electric power outlet would charge the battery, manufactured by a South Korean company.

"We will be the spark that triggers change and tells people now is the time," said Lam. "Let's push change in the industry for environment's sake, for the sake of less dependency on petrol, for the sake of zero emission and for noiseless driving."

Detroit Electric name dates to 1907
Lam, a British citizen and a longtime auto industry executive, joined a group of Dutch investors and inventors of the car's motor to set up a company in Damwoude, Netherlands. Lam bought the rights to the company's name — Detroit Electric produced electric cars in the U.S. in 1907 — to restore its historical legacy.

The engineers developed the car over 18 months and two working models were demonstrated to journalists last year.

Proton, which has struggled in recent years, could benefit from the agreement and create a niche market for itself.

"The project shows that Proton can adapt well to the current challenging economic climate," said Proton Managing Director Syed Zainal Abidin bin Syed Mohamed Tahir. "As a manufacturer, we have to think differently from others and start venturing into new areas where there are potential for growth," he said.

He said the deal will earn Proton revenue of at least $555 million over four years, even if it makes only 40,000 cars per year.

Proton will have the option of buying the Detroit Electric technology after a nine-month evaluation period and to sell the car under its own brand in Southeast Asia.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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