The German automaker hopes to start importing the battery for use by 2012, the Japanese paper said, citing company sources. By working with Sanyo, Volkswagen hopes to catch up with rivals in eco-friendly vehicles, the report said.
German cars are considered among the least fuel-efficient in Europe and carmakers are under pressure from environmental groups to clean up and develop greener models.
Lithium-ion batteries are widely used in personal computers and mobile phones, and Sanyo has the largest global market share for them. Toyota, which has enjoyed enormous successes with its Prius hybrid model, has worked with Matsushita Electric Industrial, known for its Panasonic brand, to start mass-production of a lithium-ion battery for use in Toyota's hybrid models by 2010, the Nikkei said.
Nissan and Japanese electronics giant NEC Corp. have also agreed to start mass-producing a lithium-ion battery for a more ecologically-friendly vehicle than is possible with nickel-hydrogen batteries, which are used widely in vehicles now, the report said.
The lithium-ion battery that Sanyo and Volkswagen will develop will be smaller than a nickel-hydrogen battery, making it possible to design lighter cars than those using conventional batteries.
Sanyo is going through a restructuring and believes its battery business is key to its turnaround. Sanyo currently manufactures nickel-hydrogen batteries that can be recharged repeatedly and supplies them to Honda and Ford.
Volkswagen and subsidiary Audi are to adopt Sanyo-made nickel-hydrogen batteries for use in the Volkswagen group's first hybrid model, to be rolled out as early as next year, according to the report.