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Sanyo sees big growth in batteries

Sanyo's business in building batteries for hybrid cars is booming.

Automotive News

TOKYO--Sanyo Electric Co., already one of the world's largest makers of batteries for hybrid vehicles, sees rapid expansion next year after a $1 billion investment in green technology. It may start assembling battery systems in North America, Europe, and China as early as 2012.

The Japanese company brings its first lithium ion battery plant online in western Japan later this month to supply 15,000 to 25,000 Audi hybrid vehicles a year. It will add another lithium ion plant by the end of next year to manufacture more powerful batteries for plug-in hybrids.

At least two carmakers have lined up for the plug-in batteries. Spokesman Hiroyuki Okamoto declined to name them. "We are now in the final negotiations," Okamoto told Automotive News.

News reports in Japan indicate that one is Toyota Motor Corp., which will use the power packs in its plug-in Prius hybrid.

Sanyo can expect a lift from its impending acquisition by former rival Panasonic Corp. Panasonic's public offer to buy Sanyo shares closes Dec. 9. If the sale goes through, Sanyo will become a subsidiary of Panasonic in January, Okamoto said.

As part of the takeover, Panasonic has pledged to channel ¥100 billion ($1.15 billion) of new investment into Sanyo's solar cell and rechargeable battery businesses, Okamoto said.

Panasonic also will lower its stake in Panasonic EV Energy Co., Sanyo's main rival in making batteries for hybrid cars. That company is a joint venture between Panasonic and Toyota. It supplies batteries for Toyota hybrids, including the Toyota Prius.

Toyota owns 60 percent of Panasonic EV Energy, and Panasonic owns 40 percent. But after the Panasonic-Sanyo merger, Panasonic's stake will drop to 19.5 percent, handing Toyota the rest, Okamoto said. He said that will lead Panasonic to rely increasingly on Sanyo's batteries for growth.

Sanyo is ramping up production of lithium ion batteries to meet the shift away from nickel-metal hydride batteries. Nickel metal batteries are used widely in today's hybrid vehicles, including the Prius. But lithium batteries are lighter and more powerful. Mitsuru Homma, Sanyo's executive vice president for batteries, forecasts that hybrids, plug-ins, and electric vehicles will account for 11 percent of worldwide sales in 2020. Sanyo wants a 40 percent share of the global battery market by then.

Sanyo wants to boost its production to 10 million lithium ion cells a month by 2015, from an estimated 1 million cells a month next year. Sanyo declined to say how many cars that could supply because the number of cells per car varies by model.

For now, Sanyo will keep production in Japan. But if overseas demand grows sufficiently it may export battery cells and assemble battery packs locally, Okamoto said. Local production could start in North America, Europe, or China as early as 2012.

(Source: Automotive News)