GM, Ford and GE are to develop plug-in hybrid electric vehicles with the help of $30m worth of funding from the US Department of Energy.

With petrol prices soaring, research into alternative more cost-effective power sources for cars continues unabated.

Last week, the US Department of Energy (DOE) stepped up to the plate with $30m worth of funding which it handed out to General Motors, Ford and General Electric to help them develop Plug-in Hybrid Electric Vehicles (PHEVs) that are capable of travelling up to 40 miles without recharging.

The DOE’s mission is to make PHEVs cost-competitive with petrol cars by 2014 and economical enough to mass produce by 2016.

PHEVs are hybrid vehicles that can be driven in electric-only or hybrid mode and recharged from a standard electric outlet. A 40-mile all-electric range would encompass most daily roundtrip commutes, satisfying 70 per cent of the average daily travel in the US - without the use of petrol.

For the cash, each company must develop at least 80 PHEVs over the next three years, starting with 10 vehicles in the first year, 20 in the second and 50 in the third.

This is the first round of funding that has been awarded under the DOE’s so-called PHEV Technology Acceleration and Deployment Activity. Those companies interested in applying for the second round of funding have until July 18 to do so.