German automaker Volkswagen AG will team up with Japan's Sanyo Electric to develop a lithium-ion battery for next-generation hybrid vehicles, the Japanese company announced Wednesday.
By joining forces with Sanyo, which aims to be a world leader in rechargeable batteries, Volkswagen is apparently seeking to catch up with rivals in the race to develop and sell eco-friendly vehicles.
Sanyo and Volkswagen have worked together in the past in battery development. The Japanese company has also supplied nickel-metal hydride batteries to Ford Motor Co. and Honda Motor Co.
Automakers are stepping up their focus on lithium-ion batteries amid increasingly interest in fuel-efficient vehicles at a time of soaring petrol prices.
Lithium-ion batteries are smaller and lighter than the nickel-metal hydride batteries now used in hybrid and electric cars.
But automakers have been cautious about their use following problems with lithium-ion batteries for laptop computers catching fire.
Nissan Motor Co. and NEC Corp. said earlier this month they will invest 115 million dollars to mass produce new batteries for electric, hybrid and fuel-cell vehicles.
Toyota reportedly plans to build a new plant to produce lithium-ion batteries for its plug-in hybrids, which would be the first time that Japan's largest automaker has mass produced such batteries.
Toyota has taken a lead in sales of hybrids, which are equipped with an electric motor and a standard petrol engine, making them more economical and environmentally friendly than conventional autos.
But it is facing growing competition from Japanese and foreign rivals.
Sanyo has increased its focus on rechargeable batteries in recent years while slashing thousands of jobs and selling non-core operations as part of a massive overhaul.
The revamp appears to be paying off, with the company reporting its first annual net profit in four years earlier this month.
