Green battery plant for Toyota

The joint venture that Toyota has with Matsushita Electric Industrial, the electronics company that makes Panasonic brand products, will set up the battery plants, The Nikkei business daily reported without citing sources.

One plant will produce nickel-metal hydride batteries while another will produce lithium-ion batteries, which are planned for future ecological cars, the report said.

Japan's top automaker, which leads the industry in gas-electric hybrids with its hit Prius, has said it will rev up hybrid sales to 1m a year sometime after 2010.

Hybrids reduce pollution and emissions that are linked to global warming by switching between a gas engine and an electric motor to deliver better mileage than comparable standard cars. But they are still a relatively niche market.

Toyota's Prius, which has been on sale for more than a decade, recently reached cumulative sales of 1m vehicles.

Lithium-ion batteries, now more common in laptops, 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.

The world's other major automakers are also working on environmentally-friendly cars, and the race is on to produce the best batteries to power them.

Earlier this week Honda, Japan's second-biggest automaker, said it will boost hybrid sales to 500 000 a year by sometime after 2010. Honda said it will introduce a new model sold solely as a hybrid next year, so the Tokyo-based company will have four hybrids in its lineup.

Nissan, which still hasn't developed its own hybrid system for commercial sale, said it will have its original hybrid by 2010. Nissan is focusing more on electric vehicles, promising them for the US and Japanese markets by 2010.

Nissan said this week its joint venture with electronics maker NEC will start mass-producing lithium-ion batteries in 2009 at a plant in Japan.

- AP