GS Yuasa plans rapid rise in battery output

TOKYO (Reuters) - A Japanese battery joint venture led by GS Yuasa Corp (6674.T) said on Wednesday it aimed to boost production capacity by five times to 10,000 a year in the short term to meet anticipated growth in demand for electric vehicles.

GS Yuasa shares rose 8.9 percent to 516 yen, outperforming a 2.6 percent gain in the benchmark Nikkei average .N225.

Venture partner Mitsubishi Motors Corp (7211.T) plans to launch its electric compact car "i-MiEV" in Japan in 2009 and has recently increased its first-year sales target given strong interest in electric vehicles amid surging oil prices and growing awareness of global warming.

The venture, in which trading house Mitsubishi Corp (8058.T) also has a stake, plans to spend about 2.5 billion yen ($23 million) to build a factory to make lithium-ion batteries, starting production next spring.

In an interview with Reuters last month, GS Yuasa president Makoto Yoda said the firm was looking for a bigger site for its planned lithium-ion battery factory as it expected demand for batteries for electric vehicles to at least double each year once shipments start next year.

The venture had been scheduled to begin mass production early next year with the original planned annual output enough to power 2,000 cars.

(Reporting by Taiga Uranaka and Chang-Ran Kim; Editing by Louise Ireland and Michael Watson)