Sanyo To Supply Lithium-Ion Batteries For Hybrids

Sanyo Electric, the world’s biggest maker of rechargeable batteries, will supply lithium-ion batteries to two unnamed automakers within the next two years, says businessweek.com.

The lithium-ion batteries will be employed by a Japanese automaker (believed to be Toyota) and a “foreign carmaker” for use in plug-in hybrid vehicles as early as the latter half of 2011.

Sanyo believes that global sales of hybrid cars using lithium-ion cells will grow to 2.3 million units annually by 2015 and 10.2 million by 2020. “Lithium-ion batteries used in cars are likely to be the winners in a high-growth market and that’s why Sanyo has made it the centerpiece of its business strategy,” a Sanyo executive told Business Week.

The migration of lithium-ion batteries to hybrid cars is considered significant because hybrids have mostly used nickel-metal hydride batteries up to now. Plug-in hybrids could be a big market for lithium-ion, however, because vehicles like the Chevy Volt need to travel 40 miles solely on battery power. GM has said it will build 60,000 Volts annually and Toyota has said it will roll out a plug-in version of the Prius by 2012.

Sanyo’s business strategy contrasts sharply with the findings of consultants such as Lux Research, which has said that low demand for electric vehicles could soon cause a supply glut of batteries.  “If you look at the announced market for lithium-ion battery products by 2015, it’s enormous,” says Jacob Grose, an analyst for Lux Research, Inc. “The trouble is that the government has paid to build these factories, and if electric vehicles don’t sell at the necessary volumes, there’s going to be an over-supply.”