Firms in battery technology accord

31 May 2008 09:18pm

Japanese electronics maker Sanyo and Germany's Volkswagen have agreed to develop lithium-ion batteries for hybrid vehicles, both sides have said.

The latest agreement follows one in January 2006, when Sanyo and Volkswagen agreed to work together in nickel metal hydride batteries, now used in most petrol-electric hybrids such as Toyota's Prius.

Sanyo already provides nickel metal hydride batteries for Ford, which makes the Escape hybrid, and Honda , which makes the Civic hybrid.

"Our focus in future will be directed more strongly at making electrically powered automobiles alongside ones driven by more efficient combustion engines," Volkswagen Chief Executive Martin Winterkorn said in Germany. "This cooperation is an important step for us."

Lithium-ion batteries, now widely used in laptops and other gadgets, are more powerful and can be smaller than nickel metal hydride batteries, promising potential to power future ecological cars. Volkswagen said it hopes to use lithium-ion batteries by 2010.

Many major carmakers are racing to perfect the technology for hybrids, electric vehicles and other "green" cars. With their better fuel economy and lower emissions, such cars are becoming increasingly attractive to consumers.

The agreement between VW and Sanyo does not involve producing batteries at a jointly-run plant. But Sanyo said that it will start mass producing lithium-ion batteries in a Japan plant by next year, making 15,000 to 20,000 batteries a year.

Sanyo said it will invest 80 billion yen (£386 million) to expand production by 2015, including setting up a new plant. It did not give details on the planned plant.

Concerns about ecology and global warming, as well as strict regulations in the US, Europe and other regions are pressuring companies to develop fuel-efficient vehicles.

In March, Volkswagen showed its Golf TDI Hybrid design study, which combined high-tech-diesel and an electric motor to reduce fuel consumption.

© The Press Association