Nissan, NEC Could Give Electric Vehicle Batteries a $1.1B Boost

The world of electric vehicle batteries has been heating up over the past few weeks, and now it looks like Nissan Motor and NEC are accelerating their plans for hybrid and electric vehicle battery production. The two Japanese companies are expected to invest at least ¥100 billion ($1.1 billion) to manufacture large-capacity lithium-ion batteries, according to a report in the Nikkei business daily.

The Nissan-NEC venture plans to roll out enough batteries to equip a total of 200,000 electric and hybrid vehicles per year by 2011 or later, said the paper. That’s a big boost from an announcement back in May, when the venture — called Automotive Energy Supply — said that it would invest ¥12 billion over three years to build the batteries, with a targeted production capacity of only 65,000 units.

The reported increased investment from Nissan and NEC follows the creation of a battery consortium earlier this month by more than a dozen U.S. technology companies as a reaction to Asian dominance in the battery market.

That U.S. consortium could end up competing on its home turf with Nissan and NEC. Nikkei said that Nissan and NEC plan to build a new factory in Japan in 2011 or later, but are also looking at setting up factories in the U.S. and Europe to take advantage of low-interest loans offered by local governments for the production of low-emission vehicles.

This month has also seen battery news from Toshiba, Panasonic (s PC), and Honda Motor (s HMC). Toshiba said it plans to build a second factory for its rapid-charge electric vehicle lithium-ion battery, with construction to start next fall. Panasonic announced an agreement to buy Sanyo for ¥800 billion in a deal that it said focuses on the combination of the solar and electric vehicle lithium-ion battery businesses of the two companies. And Honda signed a deal with Japanese battery maker GS Yuasa to form a ¥15 billion joint venture for the development of lithium-ion batteries for hybrid vehicles.

Nissan is a partner with Renault in a number of electric car charging infrastructure projects around the world, and is working with California’s Better Place on projects in Israel, Denmark and Australia.