Toyota to start lithium-ion battery output in 2009

Toyota Motor Corp (7203.T) said on Wednesday its battery joint venture with Matsushita Electric Industrial Co (6752.T) will start full-scale production of lithium-ion batteries in 2010 as it aims to roll out more electricity-driven cars over the next few years.

Toyota, the world's top maker of gasoline-electric hybrids, is keen to bring such vehicles into the mainstream by lowering their cost premium as more consumers around the world demand higher fuel economy amid record-high energy prices.

The battery venture, called Panasonic EV Energy Co, currently produces nickel-metal hydride batteries used in Toyota's hybrid vehicles, and is building two new factories to bring annual output capacity to 1 million batteries around 2010.

Toyota, which put the world's first hybrid car on the road in 1997, has a goal of reaching global annual sales of 1 million hybrid vehicles soon after 2010, more than double what it sold last year. It has sold a total 1.5 million hybrids since the first Prius hybrid was launched over a decade ago.

Many big automakers are working in partnership with battery makers on developing vehicle-use lithium-ion batteries, which can store more energy in smaller, lighter packages and are seen as crucial for extending the cruising distance of purely electric vehicles. Such batteries are commonly used in laptops and mobile phones.

Toyota, the world's biggest automaker, also said in a statement it would establish a battery research department later this month to develop next-generation batteries that would outperform lithium-ion batteries.

Domestic rivals Nissan Motor Co (7201.T) and Mitsubishi Motors Corp (7211.T) have joint ventures with the NEC Corp (6701.T) group and GS Yuasa Corp (6674.T), respectively, to mass-produce lithium-ion batteries from next year.

Toyota has said it will use lithium-ion batteries in a rechargeable, plug-in hybrid vehicle due for launch for fleet customers in Japan, the United States and Europe by 2010.

"We plan to use both nickel-metal hydride and lithium-ion batteries, choosing the appropriate option depending on the vehicle," President Katsuaki Watanabe told a news conference to outline Toyota's environmental activities.

Toyota has not said if it will use lithium-ion batteries in its third-generation Prius, widely expected for launch some time next year, but the start of full-scale battery production suggests it could be used soon.

To help reach its hybrid sales goal, Toyota plans to start production of its Camry hybrid model in Thailand and Australia over the next two years, it said on Tuesday.

Toyota is due to showcase new hybrid-only models, under both the Toyota and Lexus luxury brands, at the next Detroit auto show in January.

(Reporting by Chang-Ran Kim; Editing by Michael Watson)