Volkswagen and Sanyo join hands to develop new lighter batteries for hybrids

Volkswagen AG along with Japan's Sanyo Electric is in the process of developing a lithium-ion battery, a key component of hybrid and electric cars. Sanyo is going through a restructuring and believes its battery business is key to its turnaround. Sanyo is currently manufacturing nickel-hydrogen batteries that can be recharged repeatedly and supplying them to Honda Motor Co. and Ford Motor Co. Volkswagen and subsidiary Audi AG will also adopt Sanyo-made nickel-hydrogen batteries for use in the Volkswagen group's first hybrid model, to be rolled out as early as next year. Toyota, which has enjoyed enormous successes with Prius hybrid model, has worked with Matsushita Electric Industrial, known for its Panasonic brand, to start mass-production of a lithium-ion battery for use in Toyota's hybrid models by 2010.
By working with Sanyo, Volkswagen hopes to catch up with rivals in eco-friendly vehicles. The lithium-ion battery that Sanyo and Volkswagen will develop will be smaller than a nickel-hydrogen battery, making it possible to design lighter cars than those using conventional batteries.