M'bishi, Peugeot to tie up in electric vehicles:Nikkei

TOKYO (Reuters) - Mitsubishi Motors Corp (7211.T) will tie up with France's PSA Peugeot Citroen (PEUP.PA) in electric vehicles, supplying technology and next-generation batteries, the Nikkei business daily reported on Monday.

The two automakers may also look at forming a joint venture to build electric vehicles, the paper said.

Momentum to make electric vehicles more mainstream has increased as more consumers around the world demand higher fuel economy amid record-high oil prices and Mitsubishi Motors has been at the forefront of this movement, planning to commercialize an electric vehicle by 2010.

Mitsubishi will supply Peugeot with technology relating to the conversion of electricity into drive power and the prevention of batteries from overheating, the paper said.

It will also supply Peugeot with lithium-ion batteries that it is developing with GS Yuasa Corp (6674.T).

Lithium-ion batteries can store more energy in smaller packages and are seen as crucial for extending the cruising distance of purely electric vehicles.

Officials at Mitsubishi Motors were not immediately available for comment.

Mitsubishi and Peugeot have joined hands in other areas.

They are planning a joint venture in Russia to produce cars from 2011, and have an operational tie-up under which Mitsubishi Motors builds 4X4 vehicles such as the C-Crosser and Peugeot 4007.

(Reporting by Edwina Gibbs)