Chrysler LLC selected A123Systems to build lithium ion battery cells, packs and modules for its electric cars which are expected to begin hitting showrooms in late 2010.

The electric vehicle components will be used in Chrysler's ENVI vehicles, which have been in development for a little less than two years, Lou Rhodes, president of the company's ENVI division said. The five vehicles included the Dodge Circuit EV, Jeep Wrangler EV, Jeep Patriot EV, Chrysler Town & Country EV and the Chrysler 200C EV concept.

"The design, development and chemistry is A123," Rhodes said. "They've been a trusted partner over the last three years."

Chrysler has been tight-lipped about who is helping them build their electric engine vehicles, one of which they say will hit the market next year. The company has not said which one, but has unveiled a minivan, a sports car and two Jeeps with electric engines in the past year.

Rhodes would not say who is building other key components needed to drive an electric vehicle, such as the control unit and motor, but said announcements will coming in the near future.

Former engineers say few people inside the company are working directly on these vehicles, leading to speculation for months that they are being developed largely using outside technology.

Rhodes said the collaborative approach Chrysler is taking does not necessarily put them behind the ball.

"You absolutely have to start somewhere," he said.

Rhodes acknowledged the development of electric engines is unlikely to help the company reach profitability in the short term, but is a critical component of the company's long term viability.

"We do expect to drive volumes up over time," he said. "But the objective is for Chrysler to be a leader in electric vehicles."

General Motors Corp. (GM) is already working to bring an electric vehicle to market by 2010. Much of the technology was developed internally by the auto maker.

A person familiar with the matter said talks between Chrysler and Tesla Motors, another electric-engine making company, broke down more than a year ago, prior to any conversation had begun with any other electric-engine maker.

This would mean Chrysler's electric-engine technology is even more nascent than the company is acknowledging, this person said.

"They were both left without a date and so decided to get together," the person said of Chrysler and A123.

Rhodes denied the company had any talks with Tesla.

A Watertown, Mass. based-company, A123 does not make the other key components Chrysler would need to make an electric vehicle, but Rhodes said all other component makers were picked last year.

--By Alex Kellogg; alex.kellogg@wsj.com; 248-204-5519