A joint venture between Japan's Toyota Motor Corporation and Matsushita Electric Industrial Co will set up two plants to make batteries for environment-friendly gas-electric hybrid vehicles, media reports said.
The joint venture, called Panasonic EV Energy Co, will make an additional investment of 20 billion yen for making batteries for vehicles, reports said.
The move is apparently intended to boost production of batteries for hybrid vehicles at the joint venture, reports said.
Panasonic EV Energy, based in Kosai, Shizuoka Prefecture, central Japan, is 60 per cent owned by Toyota and 40 per cent by Matsushita.
The new venture aims to increase production of nickel-metal hydride batteries while aiming to start mass production of next-generation lithium-ion batteries at an early date, sources said.
One plant will produce nickel-metal hydride batteries while another will produce lithium-ion batteries, the report said.
Toyota, Japan's top automaker and world's No2, is aiming to boost is annual hybrid vehicle sales to one million units in the early 2010s.
Toyota, which leads the industry in gas-electric hybrids with its Prius, which has sold nearly a million units in the decade of its launch, has said it will increase hybrid sales to one million a year by 2010.
Hybrids help to reduce pollution and emissions by switching between a gas engine and an electric motor to deliver better fuel efficiency than comparable standard cars.
Lithium-ion batteries produce more power and are smaller than nickel-metal hydride batteries, which are now used the Prius. Toyota has said the lithium-ion batteries may be used in plug-in hybrids, which can be recharged from a home electrical outlet.
Automakers around the world, including Honda Motor Co, Nissan Motor Co, - both Japanese carmakers - are working on environment-friendly cars, and the race is on to produce the best batteries to power them.
Nissan, which is focusing more on electric vehicles, said its joint venture with electronics maker NEC Corporation will start mass-producing lithium-ion batteries in 2009 at a plant in Japan.