General Motors Corp. (GM) has begun work on a plug-in hybrid power system for its Saturn Vue sport utility vehicle that could save on gasoline use, Chief Executive Rick Wagoner said Wednesday at the Los Angeles Auto Show. He offered no timetable on when it will be available, however.

Wagoner also said GM will start offering versions of its Hummer models that could run on biofuel within three years. The Hummers have become a lightning rod for critics of vehicle fuel efficiency.

Click here to visit FOXBusiness.com's Autos Center.

"By developing alternative sources of energy and propulsion, we have the chance to mitigate many of the issues surrounding energy availability," he said in a speech at the auto show.

Hybrid vehicles have both electric and gasoline power systems. They save on gas consumption by shutting off the engine while idling, giving the vehicle a boost of electric power during acceleration and capturing electrical energy when the vehicle is braking.

GM already produces a hybrid Saturn vehicle — the Vue Green Line SUV — which the automaker says gets 27 miles per gallon in the city and 32 miles per gallon on the highway. The comparable traditional-engine Vue is rated at 22 mpg in the city and 27 mpg on the highway.

With a plug-in hybrid power system, batteries can also be recharged by plugging them into an electrical outlet.

GM has been promoting the Vue Green Line as a less expensive alternative to hybrids already on the market from Toyota Motor Corp. (TM) and Ford Motor Co. (F). The Green Line's hybrid system adds about $2,000 to the cost of a Saturn Vue, compared with a premium of $3,500 or more for other hybrids.

In Washington, Toyota North American President Jim Press said the Japanese automaker was "really enthused that the industry and other auto companies are embracing this technology."

Toyota has expressed interest in developing plug-in hybrids and Press said the company's lead in hybrid sales "gives us an advantage."

The start of production of the plug-in hybrid version of the Saturn Vue will depend on progress in battery technology, Wagoner said. He said the automaker is working with several battery companies on the project.

"The technological hurdles are real, but we believe they're also surmountable," he said. "I can't give you a date certain for our plug-in hybrid today, but I can tell you that this is a top priority program for GM, given the huge potential it offers for fuel-economy improvement."

Wagoner said with diversity of power sources, automakers will "be able to better cope with future increases in global energy demand."

"We'll minimize the automobile's impact on the environment," he said. "We'll be able to take full advantage of the incredible growth opportunity for cars and trucks around the globe. We'll take a lot of risk out of our business and likely improve the profitability of the industry."

GM's longer-term goal remains the development and production of nonpolluting hydrogen fuel-cell powered vehicles, Wagoner said.

"We continue to make significant progress in this area, and we continue to see fuel cells as the best long-term solution for reducing our dependence on oil," he said.

Wagoner said that according to the Energy Department the world will need about 70 percent more energy from 2003 to 2030, and oil alone will not be able to handle the increase.

"For the global auto industry, this means that we must — as a business necessity — develop alternative sources of propulsion based on alternative sources of energy in order to meet the world's growing demand for our products," he said.

GM shares rose 2 cents to $29.99 in midday trading on the New York Stock Exchange.

Click here to visit FOXBusiness.com's Autos Center.