TOKYO: Nissan Motor Co. said Wednesday that it will make a Japanese automotive lithium-ion battery producer a subsidiary.

By placing Vehicle Energy Japan Inc. under its wing, Nissan aims to stably procure lithium-ion batteries amid growing moves for vehicle electrification both within and outside of Japan.

The major Japanese automaker will obtain a majority stake in Vehicle Energy Japan, based in the city of Hitachinaka, Ibaraki Prefecture, eastern Japan, by buying all of the 47 pct stake now held by Japanese government-backed investment fund INCJ Ltd. and accepting common shares to be newly issued by the target firm.

Nissan did not disclose the value of the deal.

Vehicle Energy Japan currently manufactures batteries for hybrid vehicles while developing next-generation batteries for electric vehicles.

INCJ decided in 2018 to support Vehicle Energy Japan, then called Hitachi Vehicle Energy Ltd., and invested 10.1 billion yen in the firm.

Vehicle Energy Japan supplies Nissan with batteries for hybrid vehicles.

“The (upcoming) investment will allow Nissan to secure a stable battery supplier and contribute to the development of next-generation batteries with a competitive edge in terms of both performance and cost,” Nissan said in a statement released the same day.

Among other major Japanese automakers, Toyota Motor Corp. announced last month that it would spend up to 730 billion yen to beef up its production capacity for batteries for electric vehicles in Japan and the United States.

Honda Motor Co. has decided to set up an electric vehicle battery plant in the United States jointly with South Korea’s LG Energy Solution Ltd. Honda also plans to establish a Chinese joint venture to procure batteries.

JIJI Press