Asian companies already are making inroads into the United States.
LG Chem edged out A123 Systems, a Massachusetts startup, to supply General Motors Co. with lithium ion batteries for the Chevrolet Volt. Washington even handed LG Chem's U.S. unit, Compact Power Inc., $151.4 million in grant money to help the project.
GM also tapped Hitachi as a battery supplier.
LG Chem has been mass-producing lithium ion batteries since 1999. It began supplying the batteries to Hyundai Motor Corp. in July. For the Volt, LG Chem will start supplying batteries late next year and open a lithium ion battery production site in Holland, Mich., in 2012.
LG Chem says it will spend 1 trillion won ($846.6 million) on its battery business by 2013. By 2015, it sees industrywide sales of lithium ion batteries approaching $8.47 billion. The South Korean company wants 13 percent of the global market.
Japan's Sanyo supplies nickel-metal hydride batteries for the Ford Escape Hybrid and Honda Civic Hybrid. The struggling company is in merger talks with the larger and stronger Panasonic.
"Panasonic and Sanyo have the advantage from the experience of mass production," says Atsushi Ishii, a powertrain forecaster for CSM Worldwide. "These companies have the technical know-how for durability and reliability evaluations."
Panasonic's vehicle battery efforts are directed through a joint venture with Toyota Motor Corp. called Panasonic EV Energy, which supplies batteries for the Prius and other Toyota hybrids.