Tokyo: Toyota Motor Corp. will buy batteries for hybrid cars from Sanyo Electric Co. to keep pace with growing demand for cleaner vehicles, a source familiar with the matter said, sending Sanyo shares up 17% at one stage.
Shares of Sanyo were up 13% at 253 yen in afternoon trade, while Toyota rose 1.7%, mirroring a rise in other auto stocks.
Toyota, the world’s biggest automaker, will first use Sanyo’s lithium-ion batteries from around 2011, said the source, who spoke on condition of anonymity because the information is not yet public.
The maker of the popular Prius hybrid will first procure about 10,000 battery units per year from Sanyo, the world’s biggest rechargeable battery maker, the source said.
A Toyota spokeswoman said nothing had been decided about procuring lithium-ion batteries from Sanyo. A Sanyo spokesman declined comment, citing company policy on deals with potential and existing customers.
Demand for gasoline-electric vehicles has surged in Japan, helped by tax breaks and subsidies under a government initiative to promote fuel-efficient automobiles, with the Prius ranking as the country’s best-selling car in July for a second straight month.
But customers placing orders for the Prius have to wait about eight months before delivery due partly to a shortage of batteries.
Toyota also said this week it had received about 10,000 orders for the Lexus HS250h sedan, the premium brand’s first dedicated hybrid car, in its first month of sale in Japan. It aims to sell an average 500 units a month.
Toyota now procures its nickel-metal hydride batteries from Panasonic EV Energy Co, a joint venture with Panasonic Corp. Panasonic plans to take control of Sanyo, and is awaiting regulatory approval.
Panasonic EV Energy has said it plans to double production capacity to around 1 million units a year by the middle of 2010.
To further ease the supply bottleneck, Toyota has said it is considering a wide range of options, including procurement from a second source and further capacity expansion at the battery venture.
Sanyo, which has a battery tie-up with Volkswagen AG, told Reuters in June that it had secured customers for its lithium-ion batteries in the US, Japan and Europe as it seeks a 25% share in the global market for auto-use rechargeable batteries by 2015.
Other battery makers such as Toshiba Corp and the joint venture between Nissan Motor Co. and NEC Corp. are also looking to supply their batteries to a broad customer base to bring costs down.