March 14 (Bloomberg) -- General Motors Corp., aiming to sell a rechargeable hybrid-electric car by 2010, said the price of its Chevrolet Volt sedan will need to reflect relatively high warranty expenses to cover the lithium-ion batteries.

``We are going to bake in a very substantial warranty cost for the battery in our overall pricing calculation,'' Vice Chairman Bob Lutz said in an interview yesterday in Santa Barbara, California. ``We need to be conservative, simply because it's the first time we've done anything like this.''

GM, the world's largest automaker, is betting it can build a lithium-ion battery pack able to deliver at least 40 miles (64 kilometers) of all-electric driving range before the Volt needs a recharge from an onboard engine or household outlet. GM's goal is to make the Volt one of the highest-volume electric autos.

Lutz, GM's product development chief, gave no details on what the warranty expense might be or how long a Volt buyer would be covered. Last month, he said Detroit-based GM won't meet an initial goal of selling the Volt for less than $30,000.

Lithium-ion batteries are lighter and able to store more energy than nickel-metal models now used in most hybrids. Automakers are counting on the new type of batteries for plug-in hybrids and more fuel-efficient gasoline-electric vehicles.

The Volt's 300-pound battery pack will be among its most- expensive components. Menahem Anderman, a battery analyst based in Oregon House, California, has estimated each such lithium-ion pack may cost about $10,000.

Lutz was attending a conference hosted by the Wall Street Journal. GM is vying with Toyota Motor Corp., Nissan Motor Co. and other automakers planning new types of hybrids and battery- powered cars to meet consumer demand -- and new government rules in the U.S. and elsewhere -- for cleaner, more-economical autos.

GM fell $1.09, or 5.4 percent, to $19.22 at 4:01 p.m. in New York Stock Exchange composite trading, the lowest since April 2006. The shares have declined 22.8 percent this year.

To contact the reporter on this story: Alan Ohnsman in Santa Barbara, California, at aohnsman@bloomberg.net

Last Updated: March 14, 2008 16:13 EDT