Toyota Plans to Sell Batteries to Rivals to Offset Costs

Toyota will sell a line of their battery packs to other automakers, even their most intense rivals. The company, already comfortable as a leader in hybrid auto technology, will sell the batteries in order to make a bigger profit on the division.

The company already has over a million units of their top selling Toyota Prius hybrids on the road. A plug-in version will soon hit the market, with new batteries to power them. Toyota has spent considerable money developing these packs, and can bring in more revenue by selling them to others, according to Executive VP Masatami Takimoto.

Despite a drop in Prius sales for 2008, and the promise of increased competition in alternative-energy vehicles, Toyota still dominates the market. The third generation Prius is expected to sell 180,000 units in the U.S. during its first full calendar year in showrooms.

Batteries for the company are made from a joint venture between Toyota and Panasonic. The automaker owns 60 per-cent of the venture, dubbed "Panasonic EV Energy Co.," and plans to open a new plant in Japan later this year. That plant will be responsible for mass production of the lithium-ion battery packs.

So far, Panasonic EV has produced nickel-metal hydride batteries for Toyota group hybrids. More than a million Toyota and Lexus vehicles use the batteries. Some of these batteries have also been purchased by GM, Ford, and Nissan for their production models.

But automakers now want to move from nickel-metal hydride because lithium-ion hold a larger charge. The new batteries are also more expensive, a cost Panasonic EV may be able to bring down with more mass production. Panasonic EV will continue to make the nickel-metal battery packs for some hybrid vehicles. Takimoto believes these packs can also be used by homeowners looking to store electricity produced by solar panels.

Toyota has confirmed the release of an electric two-seater powered by the packs for 2012. Based on the FT-EV unveiled in Detroit, it will have a minimum range of 50 miles per charge (80.5 km).

Source: bloomberg.com