Toyota to start lithium-ion battery output in 2009

By Chang-Ran Kim, Asia Autos Correspondent

TOKYO (Reuters) - Toyota Motor Corp's (7203.T: Quote, Profile, Research, Stock Buzz) battery joint venture will start producing longer-lasting lithium-ion batteries in 2009 as it aims to roll out more electric 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 costs as more consumers around the world demand higher fuel economy amid record-high energy prices.

The battery venture with Matsushita Electric Industrial Co (6752.T: Quote, Profile, Research, Stock Buzz) currently produces nickel-metal hydride batteries used in Toyota's hybrid vehicles. It is building two new factories to bring annual output capacity to 1 million batteries around 2010.

Full-scale production of lithium-ion batteries would start in 2010, Toyota said on Wednesday, declining to disclose planned output capacity.

Many big automakers are working in partnership with battery makers on developing lithium-ion batteries for cars. They can store more energy in smaller 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, 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 was launched over a decade ago.

Executive Vice President Takeshi Uchiyamada, chief engineer for the original Prius, told Reuters Toyota would continue to make most of its hybrids in Japan due to the difficulty of making key components abroad.

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