NEC, Nissan to build hybrid car battery plant

Nissan Motor Co, Japan's third- largest automaker, will build a factory with NEC Corp to make lithium-ion batteries in Japan for use in electric and gasoline-electric hybrid cars.

The two companies will spend 12 billion yen ($115 million) over three years for the plant in Kanagawa Prefecture to make lighter, more powerful batteries, they said in a joint statement yesterday.

The factory will produce 13,000 units a year initially and eventually have an annual capacity of 65,000.

Nissan is trying to catch up with larger rivals Toyota Motor Corp and Honda Motor Co in offering hybrid cars. Demand for more fuel-efficient vehicles is rising as the price of crude oil reached a record $127.82 per barrel in intraday trading on Friday.

"It's a key product for Nissan as electric cars may be able to win popularity amid higher fuel costs," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd in Tokyo, which oversees $28 billion in assets.

Nissan will raise its stake in Automotive Energy Supply Corp, the battery venture, to 51 percent from 50 percent. NEC will hold 42 percent and subsidiary NEC Tokin Corp will own the remainder, the statement said.

The venture, established in April 2007, plans to sell batteries to other companies.

NEC Tokin surged 18 percent to 318 yen at the 3 pm close of the Tokyo Stock Exchange. Nissan rose 0.4 percent to 979 yen. NEC fell 1.5 percent to 530 yen.

"The ultimate solution for sustainable mobility lies in zero-emission vehicles," Nissan Executive Vice-President Carlos Tavares said at a press conference in Tokyo.

"Electric cars represent one clear strategic direction," said Tavares.

Agencies

(China Daily 05/20/2008 page21)