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This 2008 Chevrolet Tahoe Hybrid will have GM’s new two-mode hybrid transmission, which has just gone into production. (Photo courtesy of General Motors Corporation)

WHITE MARSH, Md. — General Motors this week began production of its two-mode hybrid transmission, with the first units earmarked for the 2008 Chevrolet Tahoe Hybrid and GMC Yukon Hybrid.

The gas-electric SUVs, which have EPA ratings on par with those of a typical midsize family sedan, go into production next week and should begin arriving in dealerships before the end of the year. The Tahoe Hybrid is expected to be priced from just over $40,000.

GM’s two-mode hybrid system was developed in partnership with DaimlerChrysler — now split into two companies — and BMW. The system enables vehicles to operate in electric-only mode at lower speeds, with the electric motor assisting the gasoline engine at higher speeds. GM also teams the hybrid powertrain with its active fuel management system, which conserves even more energy by cutting off cylinders under part throttle.

The two-mode hybrid transmission combines two electric motors and four fixed gears, packaged within the same space as a conventional automatic.

The two-mode hybrid system will be extended next year to the Cadillac Escalade, the Chevrolet Silverado Crew Cab and the GMC Sierra Crew Cab. It also will be used this fall on the 2008 Chrysler Aspen and Dodge Durango. Hybrid versions of those SUVs are expected to appear later this month at the Los Angeles auto show.

BMW showed a similar two-mode system last month on the X6 crossover it unveiled at the Frankfurt show.

What this means to you: The Tahoe and Yukon are the industry’s first full-size hybrid trucks, but they’ll be joined in short order by the new Chrysler hybrid SUVs.