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Toyota building plant to rev up hybrid production

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By Yuri Kageyama

Associated Press

TOKYO — Toyota is building a $192 million plant in Japan to produce batteries for gas-electric hybrid vehicles, as it seeks to keep its lead in an intensifying race for green cars set off by soaring fuel prices.

Toyota’s joint venture with Matsushita Electric Industrial Co., which makes Panasonic brand products, is building the plant in Shizuoka prefecture, in central Japan, Toyota spokesman Paul Nolasco said Friday. He declined to give more details.

The plant will produce nickel-metal hydride batteries, now in the company’s hit Prius hybrid and other Toyota hybrid models.

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The Nikkei, Japan’s top business daily, reported Friday that Toyota was building another plant in Japan to make lithium-ion batteries, set to be running by 2010, for future ecological cars. Nolasco said no decision has been made on such a plant.

Japan’s top automaker, which leads the industry in gas-electric hybrids, has said it will rev up hybrid sales to 1 million a year sometime after 2010. The battery joint venture, Panasonic EV Energy Co., is 60 percent owned by Toyota and 40 percent by Matsushita.

Hybrids reduce pollution and emissions that are linked to global warming by switching between a gas engine and an electric motor to deliver better mileage than comparable standard cars. But they are still a niche market.

The Prius, which has been on sale for more than a decade, recently reached cumulative sales of 1 million vehicles.

Lithium-ion batteries, now common in laptops, produce more power and are smaller than nickel-metal hydride batteries. Toyota has said the lithium-ion batteries may be used in plug-in hybrids, which can be recharged from a home electrical outlet.

Rebecca Lindland, an industry research director at Global Insight, said hybrids are increasingly attractive in the United States as fuel prices surge, environmental concerns grow and tougher emission standards kick in.

Oil prices spiked above $135 a barrel this week, and consumers around the world are balking at having to pay far more than they were used to at the gas pumps.

"Hybrids are starting to make a lot more economic sense," she said at the Foreign Correspondents’ Club in Tokyo, noting that the payback for a hybrid’s higher price comes a lot faster these days.

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