A Silicon Valley start-up called Envia Systems says it has a lithium-ion battery prototype that within three years could power 300 mile-per-charge electric cars that cost between $25,000-$30,000.

Sounds too good to be true? Thus, it probably is? Maybe, and if so, it wouldn’t be the first time. If desired, doubters may stop reading here, but optimists or others at least curious can read on (and check out the company’s announcement linked below).

The story comes via Gigaom.com, which says among believers betting on this new energy horse are GM Ventures, which has invested $7 million in the company, and the U.S. Department of Energy which invested $4 million to see it hit the 400 watt-hour per kilogram target.

And this Envia Systems has done, it says, adding that 400 wh/kg represents a “world record” of around 2.5 times the energy density of some li-ion cells now being sold with 100-150 wh/kg.

Equally encouraging is that Envia says the cost for its new cells could be as low as $125 per kwh, which again, compares favorably to present li-ion batteries such as those in the Nissan Leaf priced at around $375 per kwh and the Chevy Volt at around $500-$600 per kwh.

And let’s not forget Tesla Motors, which has managed to repackage small format laptop style batteries in massive multi-cell arrays at fairly reasonable prices by today’s standards, but which Envia implied are soon to be relegated obsolete.

“Gone are the days of relying on ancient consumer batteries for automobiles and stifling this revolution by making expensive electric cars,” said Envia CEO Atul Kapadia in a barely veiled reference to Tesla.

Envia Systems was founded in the Palo Alto, Calif. public library with the idea of developing a low-cost silicon carbon cathode, and later came up with a proprietary high-voltage electrolyte.

The company now says it can see light at the end of the tunnel for its working prototype based on lithium-ion chemistry. Envia Systems also said it will prove other scientists wrong who have said li-ion chemistry is limited in how inexpensive and energy dense it could be made to be.

“The rumors of the demise of lithium-ion batteries are greatly exaggerated,” Kapadia said.

Plans now are for Envia to work with industry partners with an eye toward possibly licensing its intellectual property, or creating joint ventures to see batteries produced.

This route toward getting its products into vehicles is preferred, Kapadia said, because it takes much less money out of pocket than it would for the new company to manufacture its own batteries.

Gigaom