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Magna International Inc. is making a big leap into the electric vehicle age with a strategic alliance with Ford Motor Co. to supply key engine components for a new battery-powered vehicle.

The battery-powered compact car represents a key part of Ford's electric vehicle strategy during the next few years, which also includes more traditional gas-electric hybrids, new plug-in hybrids and a battery-powered commercial van.

Ford officials outlined the strategy Sunday at the North American International Auto Show in Detroit.

The Ford link-up with Magna comes after the Canadian auto parts giant took a Ford Focus and redeveloped it to run on battery power as way to showcase the breadth of its capabilities to auto makers. In addition to simple parts, Magna designs and assembles modules as well as complete vehicles under contract to car companies.

“Magna took an initiative to build a demonstration vehicle, which for us at Ford said, they really get it,” said Barb Samardzich, Ford's vice-president of powertrain engineering.

Ford plans to have 10,000 such battery-powered compact cars on the road beginning in 2011 and it will be a global vehicle that will be sold in the three key markets of North America, Europe and Asia-Pacific, Ms. Samardzich said.

Such partnerships between auto makers and their key parts suppliers will be crucial over the next decade as car companies rush to meet new more stringent fuel economy standards by 2020 at an estimated industry-wide cost of more than $100-billion (U.S.).

The partnership between Ford and Magna allows the auto maker to bring a battery-powered vehicle to market more quickly, Ms. Samardzich said.

Batteries are very expensive and very heavy, she noted.

“We're really looking for a breakthrough in battery technology.”

At the moment, the Focus compact has a range of about 160 kilometres, which Ford believes is more than sufficient for the average daily commute. It takes about eight hours to recharge.

The race for green leadership is one of the key themes of this year's auto show as the Detroit companies in particular struggle to emerge from a severe sales slump brought on in part by soaring gasoline prices earlier this year.

Gas prices have since collapsed to about 70 cents (Canadian) a litre in Canada and less than $2 (U.S.) a gallon in the United States.

In addition to the Ford announcement, Honda Motor Co. unveiled a production version of its dedicated hybrid model, the Insight, Chrysler revealed a new electric vehicle, Toyota Motor Corp. will show off the next generation of its Prius hybrid on Monday and announced earlier that it will launch battery-powered electric car with an 80-kilometre range by 2012.