TOKYO – Mitsubishi Motors Corp., expected to bring its i-MiEV electric car to the United States in 2011, has agreed to make 100,000 electric vehicles for PSA/Peugeot-Citroen starting this year as the Japanese automaker seeks to boost volume and cut costs.
Under the agreement, announced March 8, Mitsubishi will start producing the zero-emissions vehicles for PSA in October, and the products will be sold in Europe by year's end.
PSA aims to sell 25,000 a year, with half going to each of its Peugeot and Citroen brands.
Mitsubishi will build the cars at its Mizushima plant in Japan and base the vehicles on its four-seat i-MiEV, which goes on sale next month in Japan and by mid-2011 in the United States. Mitsubishi plans to start selling the i-MiEV in Europe by year's end.
The cars for PSA will get different body styling and will have handling and suspension characteristics. Their interiors will also differ from the i-MiEV's.
Mitsubishi is expected to supply the cars for five or six years.
Boosting volume will help bring down costs in electric vehicles. The cars need lithium ion batteries, which are lightweight and powerful but very expensive. Mitsubishi and Nissan Motor Co., which launches its Leaf electric vehicle later this year, both see volume as key.
Mitsubishi began taking retail orders for the i-MiEV last summer for the April launch in Japan. So far, it has 2,000 takers. The company plans to produce up to 9,000 electric vehicles in the car's first year on the road, and 18,000 in the second.
By the fiscal year ending March 31, 2013, Mitsubishi aims to make 30,000 i-MiEVs a year. Total electric vehicle output will reach nearly 55,000 after adding PSA's 25,000 units.
Mitsubishi and PSA had long been in talks about expanding their joint businesses and possibly forming a capital alliance. But at this year's Geneva auto show, the two companies released a statement saying a cross shareholding was not realistic at the present time.
The partners, however, reiterated a desire to expand operational ties.