GS Yuasa venture to build lithium battery plant

TOKYO, April 14 (Reuters) - Japan's GS Yuasa Corp (6674.T) said its joint venture with Mitsubishi Motors Corp (7211.T) would spend 37.5 billion yen ($400 million) to build its third lithium ion battery plant in Japan, anticipating growing demand for electric vehicles.

The move by the venture between GS Yuasa -- the world's third-largest car battery maker -- Mitsubishi Motors and trading house Mitsubishi Corp (8058.T) will boost its annual output capacity by the equivalent of batteries for 50,000 Mitsubishi Motors' i-MiEV electric vehicles.

That, along with other planned investments, will bring the venture's total annual output capacity to the equivalent of batteries for 67,800 i-MiEVs a year by 2012, from the current 2,300 vehicles.

The venture, Lithium Energy Japan, is 51 percent owned by GS Yuasa, with Mitsubishi Corp holding 34 percent and Mitsubishi Motors 15 percent.

While sceptics abound, major automakers are developing battery-run cars for use mainly in urban areas, to meet stricter emissions and mileage regulations being introduced around the world.

Mitsubishi Motors, to which the joint venture is supplying lithium ion batteries, has raised its annual sales target for the i-MiEV by 10,000 vehicles to more than 40,000 by 2012.

Nissan Motor Co (7201.T) will start selling its Leaf electric vehicle by the end of this year. [ID:nTOE62T038] ($1=93.59 Yen) (Reporting by Nobuhiro Kubo; Editing by Chris Gallagher)