Thu, May 29, 2008 - Page 11 News List

Sanyo, Volkswagen in battery deal

AP , TOKYO

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

The latest agreement follows one in January 2006, when Sanyo Electric Co and Volkswagen agreed to work together on nickel metal hydride batteries, now used in most gas-electric hybrids like Toyota’s Prius.

Sanyo already provides nickel metal hydride batteries for Ford Motor Co, which makes the Escape hybrid, and Honda Motor Co, 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, 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 automakers are racing to perfect the technology for hybrids, electric vehicles and other “green” cars. With their good mileage 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 yesterday that it will start mass producing lithium-ion batteries in a Japanese plant by next year, making 15,000 to 20,000 batteries a year.

Sanyo said it will invest ¥80 billion (US$769 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 electric motors to reduce fuel consumption.

Sanyo will also accelerate the development of lithium-ion batteries for plug-in hybrid electric vehicles, with hopes to start mass production by 2011, the company said in a statement.

Plug-in hybrids travel longer distances than an electric vehicle because they plug into a home outlet socket.

Hybrids deliver better mileage than comparable regular cars by switching between a gas engine and an electric motor.

On Tuesday, Toyota Motor Corp announced it was making its third battery plant in a joint venture with Matsushita Electric Industrial Co to make batteries for hybrids. The plants all make nickel metal hydride batteries; Toyota has not given details of its lithium-ion battery production plans.

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