Japan’s Nikkei today reported that Sanyo Electric Co. will increase spending on rechargeable batteries and solar cells to more than $2.13 billion. The company plans mass production of lithium ion batteries for plug-in hybrids and electric cars by fiscal 2012—and aims to capture 40 percent of the global market for vehicle rechargeable batteries by 2020.

Development of affordable, lightweight rechargeable car batteries—with greater energy storage capacity—is seen as the key to a mass-market for hybrid and electric cars.

Toyota Prius battery pack

Nickel metal hydride battery pack in 2010 Toyota Prius.

In December 2009, Panasonic acquired a majority control of Sanyo for $4.6 billion. The merger created Japan’s second-largest electronics conglomerate—and gave the pair a market share in nickel metal hydride batteries, used in today’s hybrids, of about 80 percent. Panasonic has historically provided batteries for Toyota hybrids, while Sanyo supplied Ford and Honda.

According to a report in Nikkei in Aug. 2009, Toyota will use Sanyo batteries in a hybrid minivan slated to debut in Japan around 2011. Toyota also plans to use lithium ion batteries in a plug-in version of the Prius.

Asian battery companies have also taken a lead in lithium ion battery technology. South Korea’s LG Chem will supply batteries for the Chevy Volt. Japan’s NEC—a strategic partner with Nissan—will produce batteries for the all-electric Leaf sedan.

Back in the USA

The United States has, by no means, given up the fight. Last week, the Department of Energy’s ARPA-E (Advanced Projects Research Agency – Energy) program announced a new round of battery research funding of about $35 million. Among the 10 companies receiving support, Tucson’s Sion Power Co. was given a $5 million grant to develop a lithium sulfur battery that can go 300 miles between charges. Another $5 went to PolyPlus Battery of Berkeley, Calif., to develop a battery that has the energy density roughly equivalent to gasoline.

The federal government has also invested in battery manufacturing capacity. In 2009, the US Department of Energy awarded $1.5 billion in grants to US battery makers in attempt to build a domestic manufacturing base for advanced auto batteries—to spur growth in the burgeoning hybrid and electric car industry, and to create clean tech jobs especially in Michigan.