UPDATE 2-Mitsubishi to cut price of electric cars - Nikkei

Thu Jun 17, 2010 9:40pm EDT

* Company says aims to cut prices but gives no time frame

* Mitsubishi Motors shares outperform broader auto sector (Adds company comment, share prices)

June 18 (Reuters) - Mitsubishi Motors Corp (7211.T) aims to cut the price of its electric vehicles to 2 million yen ($21,890) by fiscal 2012 -- down 30 percent -- to capitalise on the growing popularity of hybrids in that price range, the Nikkei business daily reported.

Mass production of lithium ion batteries, the most expensive component in an electric vehicle, will lower costs sharply, the Nikkei said.

A battery plant coming online in April 2012 will churn out 70,000 units a year, cutting battery costs to less than 1 million yen per vehicle from 2.5 million yen, the business daily said.

A Mitsubishi Motors spokesman said that the carmaker aimed to cut the price of its key i-MiEV electric car to 2 million yen by lowering output costs to promote the still-pricey vehicle, but that the company has not set a time frame for this move.

The company's i-MiEV electric car, which targets mainly commercial users and was priced at 4.59 million yen when it was unveiled last July, will effectively sell for 2 million yen after factoring in government subsidies, the Nikkei said.

Mitsubishi Motors will also work with the suppliers of motors, rechargers and other parts to reduce component numbers, making volume production easier, the daily said.

The automaker hopes to increase automated processes to about 10 percent of total assembly, up from 2 percent when production of electric vehicles began, it added.

Shares of Mitsubishi Motors fell 0.9 percent to 116 yen, however, outperforming the broader auto sector .ITEQP.T, which shed 1.2 percent. ($1=91.37 Yen) (Reporting by Viraj Nair in Bangalore and Yumiko Nishitani; Editing by Anne Pallivathuckal)