Spain in talks with Mitsubishi on lithium ion batteries in Vigo

"We are working to get a confirmed decision," Finance Minister Elena Salgado said. "Obviously we have conditions under which the plant can be set up in Spain … one of the countries which is pushing hardest for electric vehicles," she told Cadena Ser radio.

Prime Minister Jose Luis Rodriguez Zapatero is currently visiting Japan where he has met Mitsubishi chairman Mikio Sasaki. The lithium ion batteries plant would be constructed in the northwestern Spanish town of Vigo, near that of French automaker PSA Peugeot Citroen. The two groups already cooperate in the production of electric cars.

The plant would require an investment by Mitsubishi of 400 million euros (500 million dollars). Vigo is the PSA’s biggest production site by volume.

Spain’s government plans to invest 590 million euros over two years in the development of an electric vehicle and hopes to see 250,000 electric vehicles on the roads by 2014.

Mitsubishi Corp and sister company Mitsubishi Motors Corp operate a joint venture with Japanese battery maker GS Yuasa Corp to develop and produce lithium-ion batteries for electric cars. The venture, Lithium Energy Japan, is 51 percent owned by Kyoto-based GS Yuasa.

Mitsubishi Corp director Mikio Sasaki met Spain’s Prime Minister Jose Luis Rodriguez Zapatero in Tokyo on Thursday. A GS Yuasa spokeswoman said the company was considering various options for an overseas production site for electric car-use lithium-ion batteries, but that no decision had been made.

Spokesmen at Mitsubishi Corp and Mitsubishi Motors said they could not confirm or deny the talks with the Spanish government.

PSA Chief Executive Philippe Varin and his Mitsubishi Motors counterpart, Osamu Masuko, met in Vigo last week. Separately, the regional government of the northeastern Spanish region of Catalonia is in talks with Chinese car manufacturer Chery Automobile Co to build a 1 billion euro assembly plant. The factory would be the first European production plant for China’s largest independent car maker.