Sanyo began producing lithium ion batteries at the Kasai, Japan, plant in July, with initial capacity of 1 million cells a month. Sanyo targets monthly capacity of 10 million cells in five years.

(Credit: Sanyo)

KASAI, Japan--Sanyo Electric, which makes hybrid vehicle batteries for Ford and Honda, targets a tenfold increase in lithium ion battery production capacity in five years.

The company also aims to slash manufacturing costs by half in that time in its bid to become a leader in next-generation power packs for green cars, President Seiichiro Sano said.

Speaking last week at the opening of Sanyo's battery factory in this western Japanese city, Sano predicted hybrid and electric vehicles will account for 10 to 15 percent of all new-car sales in 2020. Sanyo wants at least 30 percent of that global market, he said.

Limited lithium ion battery production began at Kasai in July, with initial capacity of 1 million cells a month. Sanyo aims to raise that capacity to 10 million cells by 2015.

Sanyo did not say how many vehicles 10 million cells could supply. But it could be enough for 125,000 hybrid vehicles a month, judging by the output of its Tokushima factory.

The Tokushima plant, which opened last year for trial production, was Sanyo's first facility making lithium ion batteries for cars. It has enough capacity for 100,000 cells a month, or enough for 15,000 hybrid vehicles a year. There are roughly 80 cells per battery pack.

Sanyo has agreements to supply Volkswagen AG, Audi AG, and Suzuki Motor with lithium ion batteries. The Tokushima plant will supply lithium ion batteries for an Audi hybrid scheduled to go on sale next year, officials said. The company also is expected to supply lithium ion batteries to Toyota.

Sanyo already is supplying hybrid vehicles by Ford Motor and Honda Motor with older-generation nickel-metal hydride batteries. Sanyo has also agreed to cooperate on development of nickel-metal hydride batteries with Volkswagen, Audi, and France's PSA Peugeot Citroen.

Lithium ion batteries are seen as key to making more practical hybrid and electric vehicles because they are lighter and more powerful than the nickel-metal hydride batteries currently used.

Many Japanese carmakers have tried to bring battery making in-house by forming joint ventures with electronics companies. Nissan, Toyota, Honda, and Mitsubishi have followed this model, teaming with such companies as NEC, Panasonic,and GS Yuasa.

But Sanyo is one of Japan's top independent hopefuls, choosing to play the field. Kasai's five-floor lithium ion battery building contains research and development facilities and two manufacturing lines. It will be the focal point of Sanyo's next-generation battery business.

The plant is doing test runs and will deliver its first products for use in 2012, said Hiroshi Ikeuchi, vice president in charge of Sanyo's hybrid electric vehicle division. With Kasai up and running, lithium ion batteries account for 30 percent of Sanyo's battery capacity and nickel-metal hydride the rest, Ikeuchi said. But that is expected to flip-flop by 2020, with lithium ion battery output claiming 80 to 90 percent of total