UPDATE 1-MMC, Peugeot mull tie-up in electric car business

(Updates with details)

TOKYO, June 17 (Reuters) - Mitsubishi Motors Corp 7211.T said on Tuesday it will consider a tie-up with France's PSA Peugeot Citroen PEUP.PA in the development and production of power trains used for electric vehicles.

The two automakers are examining various forms of collaboration, including the possibility of Mitsubishi Motors supplying batteries, motors and other power trains to Peugeot. They plan to complete their feasibility studies by the end of December, said Mitsubishi Motors spokesman Fumio Nishizaki.

“PSA can also provide us with their know-how of electric vehicles, so it really is a win-win deal for both of us,” said Nishizaki.

An alliance between the Japanese and French group would be the first of its kind, but could inspire similar tie-ups as automakers try to develop environmentally friendly vehicles due to global pressure to fight pollution and global warming.

There is growing momentum for electric cars to become mainstream vehicles as consumers try to economise on fuel amid record-high oil prices. MMC has been at the forefront of the movement and is planning to commercialise a purely electric vehicle by 2010.

MMC and Peugeot are planning a joint venture in Russia to produce cars from 2011, and have an operational tie-up under which Mitsubishi Motors builds 4X4 vehicles such as the C-Crosser and Peugeot 4007.

Shares of Mitsubishi Motors closed down 1.5 percent at 202 yen ahead of the announcement. (Reporting by Mariko Katsumura; editing by Sophie Hardach)