Honda hopes lithium-ion Civic to narrow Toyota`s lead

Honda Motor Co. plans to introduce lithium-ion battery-powered hybrid cars as it struggles to narrow Toyota Motor Corp.`s lead in sales of gasoline-electric cars.

Honda plans to use lithium-ion batteries in its Civic compact "within the next two to three years," as well as in its Acura luxury cars and other models, executive vice president Koichi Kondo said in an interview.

Honda has failed to match Toyota`s success with hybrids, led by the top-selling Prius. Lithium-ion batteries can store as much as twice the energy of nickel-metal hydride batteries that currently power the Prius and Honda`s Civic, Insight and CR-Z hybrid models, said Takeshi Miyao, a supply-chain analyst for auto consultant Carnorama in Tokyo.

"Lithium will become a lot more prevalent," Kondo said in a March 16 interview in Tokyo. The lithium-ion batteries will be produced with Honda`s joint- venture partner, Kyoto-based GS Yuasa Corp., starting in the second half of this year, he said.

"With lithium-ion being used in upcoming electric cars, Honda may be switching to the new technology to compete," said Mitsuru Kurokawa, an analyst at consulting company IHS Global Insight in Tokyo.

Honda`s Insight hybrid fell short of the company`s global sales target of 200,000 units in the first year after its February 2009 debut. Deliveries totaled 143,015 as of last month.



Toyota`s third-generation Prius replaced the Insight as the bestselling car in Japan after its release last year. Toyota sold 27,008 Priuses in February, compared with Honda`s 3,517 Insight deliveries.

In the United States, Toyota sold 7,968 Prius cars last month, compared with Honda`s 2,014 Insights. The hybrid version of the Civic sold 346 units. The larger Prius is more fuel-efficient than Honda`s hybrids, according to U.S. Environmental Protection Agency data.

Honda chief executive Takanobu Ito said in July the carmaker is developing a new hybrid system to be installed in mid- to large-size vehicles. The company will also add a hybrid version of its Fit subcompact later this year.

While similarly sized lithium-ion batteries may cost 30 percent more than nickel-metal hydride cells, carmakers may be able to find savings by using smaller packs because of their higher energy density, Miyao at Carnorama said.

Lithium-ion costs will also decline as technical advances are made and production increases, according to research company Fuji Keizai Group.

Nissan Motor Co. will roll out its first lithium-ion battery-powered car, the Leaf, this year in Japan, the U.S. and Europe.

Chief executive officer Carlos Ghosn predicts electric vehicles will account for 10 percent of global car sales by 2020.

Toyota plans to begin retail sales of a lithium-ion powered plug-in Prius in two years. The company will also start selling a short-distance all-electric car in 2012.

(Bloomberg)