Japanese rivals race for lithium batteries into high gear

Sanyo automotive Li-ion rechargeable batteries that will be supplied to the VW Group

The race to develop lithium ion batteries is shifting into high gear.

Tokyo, Japan - Japanese electronics giant Sanyo Electric Co. says it will start mass-producing the advanced hybrid-vehicle batteries next year. It also said it has added a partner: Germany's Volkswagen AG.

The move stokes a race among several Japanese companies for the lead in green vehicles. Nissan Motor Co. and NEC Corp. plan to start making lithium ion batteries next year. Toyota Motor Corp. said it will build two hybrid-vehicle battery plants with its partner, Matsushita Electric Industrial Co.

Lithium ion batteries will significantly boost the market for low-emission gasoline-electric hybrid and pure electric vehicles. The vehicles are lighter and more powerful than those powered by the nickel-metal hydride batteries now used in hybrids such as the popular Toyota Prius. Hybrids use an internal combustion engine and one or more electric batteries to power the wheels.

Sanyo is already a world leader in making lithium ion batteries, mostly for such devices as laptop computers and mobile phones. The company says it will build a plant in western Japan's Tokushima prefecture to make the batteries for hybrid vehicles.

The plant will open in the next March and aims to supply 20,000 units a year.

Several companies, including Toyota and General Motors, plan to roll out vehicles equipped with lithium ion batteries starting in 2010. But the batteries themselves have been dogged by safety concerns about overheating and by technical and cost hurdles.

Sanyo envisions savings through economies of scale. The company is spending 80 billion yen ($776.7 million) on new lithium equipment. The target is total production capacity of 10 million cells a month by 2015.

Sanyo said it also is ramping up development of a lithium ion battery that can be used in plug-in electric hybrid vehicles. The company aims to start selling those in 2011. The batteries of plug-in hybrids can be charged with home current. In addition to Volkswagen, Sanyo works with Ford Motor Co. and Honda Motor Co. on lithium ion batteries.

GM has not selected a supplier for the lithium ion batteries to be used in the Chevrolet Volt plug-in hybrid.

GM has awarded two development contracts. One went to Compact Power Inc., of suburban Detroit, a subsidiary of South Korea's LG Chem. The other was awarded to Continental Automotive Systems, which will assemble battery packs using cells made by Johnson Controls-Saft Advanced Power Solutions and other suppliers.

[Source : Automotive News China (Subscription required)]