Detroit Electric, which owns the technology, and Proton are scheduled to sign a formal agreement later Monday in the presence of Prime Minister Abdullah Ahmad Badawi, to produce the sedan initially targeted for European and U.S. markets.
"Once people drive our car they will believe in our technology. They will understand it is an electric car of respectable quality," Detroit Electric Chief Executive Albert Lam told The Associated Press in an interview.
He said the four-door vehicles - called simply Detroit Electric, without any specific model name - will roll out of Proton's factory by early next year. The aim is to produce 40,000 units in the first year, ramping up to 270,000 by 2013, he said. The cars will be priced between $23,000 and $33,000, depending on the model and tax.
If it succeeds, Detroit Electric would be among the first to mass-produce an electric car driven purely by a noiseless battery-powered motor, unlike current hybrid engines that combine gasoline engines and electric motors.
General Motors Corp., Toyota Motor Corp., Ford Motor Co., PSA Peugeot-Citroen, Mitsubishi Motors Corp. and Tesla Motors are all seeking to develop an electric cars market amid rising consumer interest in "green" technologies - and at a particularly difficult time for the industry amid the global slowdown.
U.S.-based Tesla Motors has a prototype that has a claimed range of 160 miles that is scheduled to be produced by 2011, and cost about $50,000. A Peugeot-Mitsubishi collaboration, the iMiEV hatchback, expected to reach European consumers next year, has a stated range of 90 miles.
"We will be the spark that triggers change and tells people now is the time," said Lam. "Let's push change in the industry for environment's sake, for the sake of less dependency on petrol, for the sake of zero emission and for noiseless driving."
Lam, a British citizen and a longtime auto industry executive, joined a group of Dutch investors and inventors of the car's motor to set up a company in Damwoude, Netherlands. Lam bought the rights to the company's name - Detroit Electric produced electric cars in the U.S. in 1907 - to restore its historical legacy.
The engineers developed the car over 18 months and two working models were demonstrated to journalists last year.
Lam said the motor is four times lighter than existing motors and capable of producing 200 brake horsepower, which is more than a 2.0 liter sedan can produce. The motor is 96 percent energy efficient compared to 45 percent efficiency in a gasoline engine, he said.
"We believe this is the right time to change. There is no short answer to a very large problem, but there is always a starting point," he said.
Proton, which has struggled in recent years, could benefit from the agreement.
Under the contract-manufacturing agreement, face-lift models of Proton's Gen 2 and Persona sedans will be installed with Detroit Electric's motor, lithium polymer battery and drive train. The cars will be sold under the Detroit Electric brand name.
Proton will have the option of buying the Detroit Electric technology after a nine-month evaluation period and to sell the car under its own brand in Southeast Asia.
Lam said what sets the car apart from other existing or planned electric cars is its range and the power.
The base model of the car, meant for city driving, will have a range of 150 miles on a full charge of eight to 10 hours and will have a top speed of 120 miles per hour.
The higher model will have a range of 200 miles with a top speed of 120 miles per hour. Plugging the car to an ordinary electric power outlet would charge the lithium polymer battery, manufactured by a South Korean company. Lam said the technology to produce long-range battery has existed for years, but the big auto names were reluctant to adopt it because it would have cut it into their own gasoline car market.
"All their investment will go down the drain if they start making electric cars now. They will prolong this agony of change as long as they can," Lam said. "But we have no such legacy. We came out of nowhere."
Lam acknowledged it would be difficult to get people to adopt it because of lack of charging infrastructure in public areas.
"People will take time to get used to it. But they will slowly adapt," he said. "We are changing an industry. Eventually it will accelerate. The power is in the people's hands."