Nissan,NEC plan lithium-ion battery venture-source

TOKYO, Apr 13 (Reuters) Nissan Motor Co. and NEC Corp. will set up a joint venture company to produce and develop lithium-ion batteries to be used in hybrid and other electric vehicles, a source familiar with the matter said on Friday.

The two companies, which had said they were considering such a joint venture to challenge rivals Toyota Motor Corp. and Matsushita Electric Industrial Co., said they would hold a joint news conference at 3 p.m. (0600 GMT).

Under an initiative dubbed ''Nissan Green Program 2010'' unveiled in December, Japan's third-biggest automaker set specific targets for cutting harmful emissions through the development of various engine and vehicle technologies.

That includes its own gasoline-electric hybrids, plug-in hybrids, pure electric and ethanol-based vehicles.

As a core part of such efforts, Nissan had said it would aim to achieve a breakthrough in the development of commercially viable lithium-ion batteries to fuel gasoline-electric hybrids and other electric vehicles in future, possibly working with NEC through a joint venture.

All commercial hybrids now run on nickel-metal hydride batteries, although industry experts say Toyota would likely launch the third generation of its popular Prius hybrid late next year using a lithium-ion battery.

Toyota has a battery joint venture with Matsushita. Nissan Executive Vice President Carlos Tavares told Reuters this week the company's lithium-ion technology was ready, and that production would start in time for the planned launch of Nissan's first internally developed hybrid car in 2010/11.

Nissan lags domestic rivals Toyota and Honda Motor Co. in its image as a maker of environmentally friendly, fuel-efficient cars, and lost market share in the all-important U.S. market last year as sales slid.

REUTERS DKS PM0632