sanyo plans to mass produce li ion car batteri

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Sanyo Electric Co. plans to start mass-producing lithium-ion batteries used in automobiles by the end of next year, throwing its hat into the ring in the promising next-generation automobile battery business.

The Osaka-based company also said Wednesday it has agreed to jointly develop the new lithium-ion batteries in conjunction with the Volkswagen Group for use in the German automaker's Audi-brand vehicles.

Sanyo intends to open a factory to make the batteries in 2010 and Volkswagen plans to introduce a car with them the same year, according to a Bloomberg report. The first car to get the batteries will be an Audi AG, Reuters reported.

"Our focus in future will be directed more strongly at making electrically powered automobiles alongside ones driven by more efficient combustion engines," Volkswagen Group CEO Martin Winterkorn said in a statement.

"This cooperation is an important step for us."



Europe is a tiny market for hybrid cars now, preferring cheaper diesel engines to reduce carbon-dioxide emissions and boost fuel-efficiency.

But new limits on carbon-dioxide emissions proposed in Europe and due to take effect in 2012 will significantly raise the need for hybridization, Reuters reported, citing an unidentified Sanyo executive.


Noting how Sanyo intends to shift to a new lithium-ion battery, Executive Vice President Mitsuru Honma said the advanced battery has about a 25 percent longer life than the company's currently mainline nickel-metal hydride battery and weighs about half as much.

"We won't increase production of nickel-metal hydride [batteries] anymore. We'll devote all our resources to lithium-ion," he said.

Sanyo will spend 80 billion yen ($769 million) to begin production of lithium-ion batteries, boosting annual output capacity to produce enough batteries for between 1.7 million to 1.8 million vehicles by 2015 from an initial capacity of 15,000 to 20,000 vehicles.

Production of the lithium-ion batteries will initially begin on a new manufacturing line to be set up at Sanyo's Tokushima factory in western Japan.

The company is betting that demand for auto-use batteries will grow as stricter exhaust regulations and rising gasoline prices prompt car makers to develop gas-electric hybrid vehicles and electric cars.

It expects global hybrid car sales to grow about tenfold by 2015 to 4.5 million hybrids from 2006 and hopes to grab about a 40 percent share of the worldwide hybrid battery market by that time.

Sanyo's move comes after announcements of automobile battery production projects by other car and consumer electronics makers.

Panasonic EV Energy Co, a battery joint venture set up by Toyota Motor Corp