Carmakers seek battery ties as cars go electric

By Chang-Ran Kim and Kiyoshi Takenaka - Analysis

TOKYO (Reuters) - Rechargeable batteries could become the core technology for the car industry if pure electric cars enter the mainstream -- a prospect that has carmakers racing to team up with battery makers.

Car executives say that with fewer moving parts, easy-to-assemble electric cars may also lower the bar for entry into the cut-throat car industry and make battery manufacturers the unlikely competitors for car giants.

"I've said for years that Toyota's rival will be Hitachi," said Kenichiro Senoo, a professor at the Research Centre for Advanced Science and Technology at the University of Tokyo.

"Or that in 2016, you'd be able to buy a car assembly kit in Akihabara," he said, referring to Tokyo's famous electronics shopping district.

Already, China's battery maker-cum-carmaker BYD has entered the scene, bad news for automakers whose expertise lies in the complex task of fitting together thousands of components into a safe and reliable vehicle.

Some see the shift to electric cars turning the auto industry into something resembling the PC sector, where Intel and Microsoft, which supply key devices across PC brands, take the lion's share of the industry profit.

Firms such as Panasonic and Hitachi, which have the core technology to make batteries, could be the Intels and Microsofts of the car industry of the future.

Japanese electronics conglomerate NEC plans to raise around $2 billion (1.23 billion pounds) and use some of that money in growth areas such as lithium-ion batteries, a source and the Yomiuri newspaper said on Friday.