SAO PAULO, Sept 4 (Reuters) - General Motors ( GM ) said

on Wednesday that it would begin producing its first-ever

hybrid-flex vehicles that can run on 100% ethanol or gasoline

alongside their batteries in Brazil.

Rival automakers Stellantis ( STLA ) and Honda ( HMC )

have also announced plans this year to launch hybrid-flex

vehicles in the South American country, where most cars can run

on 100% biofuel made from sugarcane or corn due to the strength

of its large ethanol industry.

GM said in a statement that two hybrid-flex models would be

made at its factories in Sao Paulo state, though it did not

specify which they would be.

The U.S. manufacturer makes other kinds of hybrid vehicles,

but has said it is committed to shifting toward fully electric

cars over the longer term.

GM did not say when it planned to launch the hybrid-flex

vehicles, but a local union at its plant in Sao Jose dos Campos

said the first model would hit the market in 2025.

The expected production and sale of hybrid-flex cars in

Brazil is part of a 7 billion real ($1.42 billion) investment

plan in the country GM disclosed in January.

On Wednesday, the firm said 5.5 billion reais of that amount

will be invested in its operations in Sao Paulo state, where it

has two car factories.

GM is the third-largest automaker in Brazil by sales,

according to data in the year through August from the Fenabrave

dealers' association.

Brazilian Vice President Geraldo Alckmin told Reuters last

year that hybrid-flex vehicles were a great asset for the

nation's decarbonization efforts.

GM also has plans to expand the portfolio of electric

vehicles it sells in Brazil, South America head Santiago

Chamorro said on Wednesday in the statement, as the automaker

currently offers just one option exported from Mexico.

GM is also studying the possibility of creating a plug-in

hybrid-flex model that could run on gas, ethanol or electricity,

it said.