Toyota to make lithium batteries for hybrids: report

TOKYO (Reuters) - Toyota Motor Corp will mass-produce lithium ion batteries for its plug-in hybrid vehicles from this autumn, the Nikkei business daily reported.

Toyota's first-ever production lines for lithium ion batteries at its plant in Aichi Prefecture and at a factory operated with Panasonic Corp in Shizuoka Prefecture are slated to cost the carmaker 10 billion yen ($120 million), the Nikkei said.

A Toyota spokeswoman declined to comment on the article, saying the company was checking the report.

The two facilities combined will make batteries for about 100,000 plug-in hybrid vehicles a year, the Nikkei said. Toyota plans to release these vehicles in Japan, the United States and Europe at the start of 2012, the paper said.

Lithium ion batteries are seen as more suitable for eco-cars, but their cost has been an issue as it accounts for about half the cost of a typical electric car, the Nikkei said, adding that manufacturing them in-house will give Toyota more control over performance and costs.

Japanese makers led by Panasonic are battling Korean makers such as LG Chem and Samsung SDI to win the biggest share of the nascent market for lithium batteries used to power computers, mobile phones, hybrids, electrical vehicles and other consumer products.

Panasonic, largely through its Sanyo subsidiary, has about a 26 percent share of the global market for lithium ion cells, according to research firm Techno Systems Research. The company has contracts to supply batteries to six automakers including Volkswagen AG and Suzuki Motor Corp.

It is also selling to U.S. partner Tesla Motors Inc in which Toyota holds a stake, the Nikkei said.

Hitachi Ltd (6501.T), which already supplies batteries for General Motors Co hybrids, will begin mass production of high-performance lithium ion batteries for plug-in hybrids in 2013, the paper said.

Shares of Toyota rose 1 percent to 3,530 yen in early trade, compared with a 0.8 percent gain in the benchmark Nikkei average.

(Reporting by Aditi Sharma in Bangalore and Tim Kelly in Tokyo; Editing by Anne Pallivathuckal and Chris Gallagher)