Chrysler LLC is planning to launch all-electric vehicles in the next three to five years, the latest automaker to join the race to produce cars with fuel-saving technologies, Reuters reports.

Chrysler's new Envi unit, which was created last September, is developing vehicles that are intended to run on battery power alone for about 40 miles, Chrysler spokesman Nick Cappa said on Monday.

Chrysler is working on a new generation of hybrid vehicles with lithium-ion batteries that are lighter and store more energy than the nickel-metal hydride batteries now in wide use.

Chrysler has not yet announced any partnership for the project or for the development of the batteries.

General Motors Corp and Toyota Motor Corp are racing to develop rechargeable hybrid vehicles using lithium-ion batteries.

GM's all-electric Chevy Volt is scheduled to go into production in 2010 while Toyota has said it will be testing a rechargeable version of its Prius hybrid with fleet customers around the same time.

Ford, which is building 20 plug-in hybrid SUVs on a demonstration basis, has said it expects to have a mass-market car in five to ten years. 

Lithium ion batteries are widely used in consumer electronics but automakers have faced a range of issues, including cost and the risk of overheating, in adapting them for use in powering cars.