Ford will make the Transit Connect its first Battery-Electric Vehicle.

Once you ignore any mention of bankruptcy, the year’s big buzzword, in automotive circles, is “electrification.” According to industry experts, virtually every new vehicle will use at least some form of battery power in its drivetrain by the end of the next decade, even if its just a basic Stop/Start system, or the sort of battery regeneration showing up on numerous European models, such as the new Audi A5 Cabriolet.

Yet, according to some, plug-ins and pure Battery-Electric Vehicles, or BEVs, could make up a significant portion of the future fleet. And one of those someones is Ford CEO Alan Mulally, at least if you hear what the former Boeing executive had to say during the recent Wall Street Journal ECO:nomics conference in Santa Barbara, California.

“In ten years, twelve years, you are going to see a major portion of our portfolio move to electric vehicles,” said Mulally. He noted that gasoline power isn’t going away, stressing his belief that, in the coming years, “we’ll have a significant improvement in the fuel efficiency in the internal combustion engine.” But while Mulally forecast, “You’ll see more hybrids…you will really see a lot more electric vehicles.”

Ford, you may recall, was the first American automaker to come up with a true hybrid-electric vehicle and, indeed, its Escape Hybrid was the world’s first HEV truck. This year, the automaker is doubling its line-up of gasoline-electric models, and the new Fusion Hybrid has the – well-publicized – advantage of delivering a full 4 mpg more than the similarly-sized Toyota Camry Hybrid.

Stung by the media success that is the Chevrolet Volt, Ford has been moving aggressively to make up lost ground — especially on the green PR front – and promises to have an assortment of both plug-in hybrids and BEVs ready for market by the beginning of the coming decade. The carmaker has been vague with details, though it confirmed, during a Chicago Auto Show press conference, last month, that the first battery car will actually be a battery-powered truck, a version of its new TransitConnect commercial van, which will debut in 2010. A plug-in is expected the following year.

The Chevrolet Volt, shown here with a mock-up of its lithium-ion battery pack.

The race to market such technology is rapidly heating up, especially as it appears some real breakthroughs are occurring in the battery R&D labs. Early forms of Lithium-Ion, or LIon, technology had some major problems. Though LIon batteries could hold about twice as much power as older Nickel-Metal Hydride technology, the newer technology was prone to unexpected failure and the occasional fire. Newer LIon batteries, such as the system GM is sourcing from Korea’s LG Chem, appears to be less prone to fire and failure.

At least, that’s the general consensus. But not everyone agrees. Toyota has had a number of problem with lithium, and Bob Carter, general manager of the flagship Toyota division, here in the U.S., said the company is “reluctant” to place too many bets on lithium’s future – a chemistry which most experts believe is essential to the production of commercially-viable plug-ins and battery vehicles. As a result, Toyota plans to test market its own plug-in, a lithium-powered version of Prius, but will limit the program, at least initially, to fleets.

“We’ll start with commercial customers,’ explained Carter, “then see if it’s attractive enough for consumers.”

Toyota’s not alone in raising skepticism about plug-ins, BEVs and lithium batteries. A new study, by researchers at Carnegie-Mellon University, in Pittsburgh, contents that these vehicles just aren’t as cost-effective as conventional hybrids – like Prius.

For one thing, contended co-author Jeremy J. Michalek, plug-ins won’t save enough gas if they can only get 40 miles per charge, as GM plans for Volt. That is, he argued, “a cost that will never be repaid in fuel savings.”

Retiring GM Vice Chairman Bob Lutz – who conceived the Volt concept – countered that the Carnegie-Mellon study used “wrong assumptions” when working out its equations, especially when it came to future gasoline prices.

Who’s right remains to be seen, but GM, it is hoping that if Volt proves successful, it could use the underlying Voltec drivetrain in other models, possibly including the Cadillac Converj, which debuted at this year’s Detroit Auto Show, as well as the Opel Ampera, which was unveiled, earlier this week, at the Geneva Motor Show.

Most makers are pushing into the advanced battery world. Nissan hopes to launch a battery-electric vehicle of its own early in the new decade, and could have several running by 2020.

But right now, if Mullaly’s comments are any indication, Ford is going to bet heavily on battery power, which would prove a sharp reversal in course considering the U.S. maker’s traditional dependence on gas-guzzling pickups and other light trucks.