We’ve been following the Chevrolet Volt since it was a gleam in GM’s eye and, with the anticipated production date of 2010 rapidly approaching, GM has announced that its extended-range electric vehicle is expected to achieve city fuel economy of at least 230 miles per gallon.

The figure is based on development testing using a draft EPA federal fuel economy methodology for labeling for plug-in electric vehicles. The new methodology being developed weights plug-in electric vehicles as traveling more city miles than highway miles on only electricity and uses kilowatt hours per 100 miles traveled to define the electrical efficiency of plug-ins.

Applying this methodology GM expects the Volt to consume as little as 25 kilowatt hours per 100 miles in city driving. Based on the average cost of electricity in the U.S. (approximately 11 cents per kWh), GM says a typical Volt driver would pay about $2.75 to travel 100 miles, or less than 3 cents per mile.

While the Volt uses grid electricity as its primary source of energy to propel the car, when the 16 kWh lithium-ion battery pack reaches a minimum state of charge it automatically switches to Extended-Range mode in which a flex fuel powered engine-generator produces electricity to power the vehicle.

GM says the Volt is expected to travel up to 40 miles on electricity from a single battery charge and will be able to extend its overall range to more then 300 miles with the Extended-Range mode. But with nearly eight out of ten Americans commuting fewer than 40 miles a day, according to U.S. Department of Transportation data, the majority of drivers should be able to get away with the Electric mode most of the time.

The Chevrolet Volt is scheduled to start production in late 2010 for availability in 2011.