According to the Nikkei business, a joint investment of nearly $1.1 billion by Japan's Nissan Motor Co and NEC Corp will result in the production of large-capacity lithium ion batteries, for use in hybrid and electric cars.

In May, it was reported that the battery joint venture would put together an investment of 12 billion yen, in a three-year period, towards the production of lithium-ion batteries, required for making the electric cars a practical proposition.

The production of the batteries, beginning from next year, will initially supply 13,000 units yearly, for use in forklifts. Gradually, by 2011, the capacity would be increased to a production of nearly 65,000 units for Nissan's own hybrid cars and electric vehicles.

Also under consideration by the Nissan-NEC venture - Automotive Energy Supply Corp (AESC) - is the possibility of setting up factories in the US and Europe, attempting to tap low-interest loans' benefit that local governments offer for the manufacture of environmentally-friendly vehicles.

Owing to the competitiveness in the field of manufacturing large-capacity lithium ion batteries, AESC would also be looking to supply other automakers. With Nissan already on way to develop electric vehicles with French partner Renault SA, the Nissan-NEC venture reportedly is also considering manufacture of the batteries in France, in order to cater to the supply for its electric vehicles.