Toyota to start lithium-ion battery output in 2009

The Toyota Motors logo is seen on a car at a Toyota showroom in Tokyo November 7, 2006.

TOKYO (Reuters) - Toyota Motor Corp's (7203.T) 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) 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.

NEXT GENERATION

Toyota, the world's biggest automaker, also said it would establish a battery research department initially comprising 50 engineers later this month to develop next-generation batteries that would outperform lithium-ion batteries.

Domestic rivals Nissan Motor Co (7201.T) and Mitsubishi Motors Corp (7211.T) have joint ventures with the NEC Corp (6701.T) group and GS Yuasa Corp (6674.T), respectively, to mass-produce lithium-ion batteries from next year.

Toyota has said it will use lithium-ion batteries in a rechargeable, plug-in hybrid vehicle due for launch for fleet customers in Japan, the United States and Europe by 2010.

"We plan to use both nickel-metal hydride and lithium-ion batteries, choosing the appropriate option depending on the vehicle," President Katsuaki Watanabe told a news conference to outline Toyota's environmental activities.

Uchiyamada said the third-generation Prius, due next year, would continue to use nickel-metal hydride batteries.

The supply of batteries presents the biggest bottleneck for the production of hybrid cars now, Uchiyamada said.

Toyota is due to showcase new hybrid-only models, under both the Toyota and Lexus luxury brands, at the next Detroit auto show in January.

To help reach its hybrid sales goal, Toyota plans to start production of its Camry hybrid model in Thailand and Australia over the next two years, it said on Tuesday.

(Editing by Michael Watson and Lincoln Feast)