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Magna plans EV battery factory in Europe for BMW, PSA, Ford

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Magna plans EV battery factory in Europe for BMW, PSA, Ford

September 17, 2010 06:01 CET

TOKYO (Reuters) -- Magna International Inc. is in talks with Japan's GS Yuasa Corp. to produce lithium ion batteries in Europe for PSA/Peugeot-Citroen SA, and possibly Ford Motor Co. and BMW AG, a source close to the discussions said.

The companies are considering building a 40 billion yen ($466 million) factory in Spain or Austria. The factory will likely start operating in 2012 and eventually make batteries for 50,000 cars a year.

GS Yuasa already supplies lithium-ion batteries for Mitsubishi Motors' i-MiEV, the world's first electric car from a major carmaker, through a three-way joint venture that also includes trading house Mitsubishi Corp.

A link-up between GS Yuasa, Japan's biggest battery maker, and Canadian supplier Magna, which has a strong presence in in Europe, would give both companies access to a broad customer base in a segment that is expected to grow as car makers plan to launch electric cars to meet stricter emissions and mileage regulations.

The companies aim to supply lithium ion batteries to Magna customers such as Ford and BMW and other car producers in Europe, the source said.

The lithium ion batteries will likely be used for a new electric vehicle that PSA plans to produce in Spain, the Nikkei business paper said.

The companies would set up a joint venture with GS Yuasa likely taking a majority stake and Magna holding a stake of between 20 percent and 40 percent. Japanese trading house Mitsubishi Corp. may also take part in the venture.

GS Yuasa has aggressive plans to expand sales as the global electric vehicle market grows amid concerns about climate change.

"The fact that they are likely to launch this venture with Magna, and not (their Japanese partner) Mitsubishi Motors, is a positive step as they will have more opportunities to sell their product to new customers abroad," said Jun Yamaguchi, an analyst at Credit Suisse.

"GS Yuasa is looking for new customers beyond their exisitng ones and that's why they decided to go for Europe," he said.

GS Yuasa said last year it aims to boost its annual lithium-ion battery sales by more than 30-fold to 100 billion yen ($1.1 billion) by March 2016.

Spanish Prime Minister Jose Luis Rodriguez Zapatero met with a Mitsubishi Corp.director during a visit to Japan this month, seeking investment for a local battery plant. Its sister company Mitsubishi Motors has a deal to start supplying electric cars to PSA, which has a large factory in Vigo, Spain.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100917/ANE/309179998/1429#ixzz0znVVRIfs

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