GM claims to be the first major U.S. automaker to produce electric motors in-house and says it is investing $246 million in the project. GM will build a new facility at the Baltimore Transmission plant to make the motors.

GM isn't saying which vehicles will get the motors, but they will be used in the automaker's two-mode hybrids. Currently, the technology is used on its full-size truck hybrids, including versions of the Cadillac Escalade and the Chevrolet Silverado. But this new generation of motors will be smaller--allowing for use in cars--and improved efficiency.

Tom Stephens, GM's product vice chairman, said the company preferred to develop and build the motors in-house because of their increasing importance, rather than outsource the job to a supplier. GM also expects to improve quality and reliability by doing it internally.

“We have decided that's a core technology,” he said.

In GM-speak, two-mode hybrids use internal-combustion engines and electric motors to improve fuel efficiency. The company also is planning a range of hybrid, electric and fuel-cell vehicles. Perhaps the most significant, the extended-range Chevrolet Volt, is due late this year.