UPDATE 1-M'bishi Motors, Peugeot to develop hybrids - Nikkei

July 9 (Reuters) - Mitsubishi Motors Corp (7211.T) and PSA Peugeot Citroen Group of France will jointly develop plug-in hybrid vehicles, the Nikkei business daily said without citing sources.

Plug-in hybrids, which sip gasoline and are low in greenhouse gas emissions, have large batteries which can be recharged at home with an extension cord, unlike conventional gasoline-electric hybrid cars which have batteries that are powered only when the driver hits the brake.

Mitsubishi Motors will supply large-capacity lithium ion batteries to Peugeot Citroen through an affiliate and the carmakers will consider supplying the hybrid vehicles to each other, the paper said.

As part of a June 2008 agreement to tie up in electric vehicles, Mitsubishi is to begin supply of its i-MiEV electric car to Peugeot Citroen as early as next year, the daily said, adding the firms also plan to jointly manufacture cars in Russia.

Mitsubishi has been developing a plug-in hybrid sport utility vehicle for commercial release by 2013, while Peugeot Citroen is working to commercialize a diesel-engine hybrid, the Nikkei said.

Toyota Motor Corp (7203.T), which leads the hybrid market, is working to achieve the world's first mass-produced plug-in hybrid cars in 2012, the paper said. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Ratul Ray Chaudhuri)