Sanyo Electric Co., Ltd. (SANYY.PK) and German automaker Volkswagen (VOW.DE), have agreed to co-develop lithium-ion (Li-ion) battery systems for Hybrid Electric Vehicles (HEV).
Lithium-ion batteries are used in laptops and other electronic devices. They are smaller and more powerful than nickel metal hydride batteries, which are currently used in most HEVs.
The Japanese electronics maker Sanyo said it will invest $769 million to ramp up mass production of the Li-ion batteries through 2015, beginning with a new Japanese plant to go online next year, producing 15,000 to 20,000 batteries a year.
Volkswagen said it hopes to begin using the lithium-ion batteries by 2010. The two companies will not produce the batteries in a joint venture.
"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. "This cooperation is an important step for us."
In January 2006, SANYO and Volkswagen agreed to co-develop next generation Ni-MH systems. Those efforts are still continuing today.
Sanyo also provides nickel metal hydride batteries for Ford Motor Co. (NYSE: F), which makes the Escape hybrid, and Honda Motor Co. (NYSE: HMC), which makes the Civic hybrid.
In March, Volkswagen unveiled its Golf TDI hybrid design, which combined an advanced diesel engine with and electric motor to reduce fuel consumption.