TOKYO, Nov 15 (Reuters) Sanyo Electric Co Ltd <6764.T>, the world's No. 1 maker of rechargeable batteries, said it may set up a joint venture with Nippon Oil Corp <5001.T> to develop, make and sell home-use fuel cell systems, sending shares of both firms higher.
Fuel cells produce electricity from hydrogen using a chemical reaction and are considered environmentally friendly because the primary byproducts are heat and water.
Sanyo has been cooperating with Nippon Oil since 2002 to develop fuel cells, but they need to cut costs and improve durability before launching commercial operations, a Sanyo spokesman said on Thursday.
The two companies are exploring various options to speed development, and establishing a joint venture is one of them, the spokesman said.
Shares of Sanyo were up 4.1 percent at 179 yen in late afternoon, while Nippon Oil rose 4 percent to 921 yen, outperforming the Nikkei average <.N225>, which fell 0.15 percent.
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