Daimler and Continental AG will share their new lithium-ion battery technology with BMW as part of Daimler and BMW's cooperation agreement on developing hybrid technology.

According to the Wall Street Journal, Daimler executive board member Thomas Weber confirmed the agreement. BMW chairman, Norbert Reithofer, had previously referred to the technology as a joint development with BMW, at the BMW press conference at the Geneva Show. In fact the companies appear to have come to a financial arrangement whereby BMW has contributed to the development costs in return for gaining access to the technology shortly after Daimler.

Weber said: "We don't want to keep this technology to ourselves…But of course we secured the related patents for our technology," reported the Wall Street Journal.

Daimler plans to launch and S-Class sedan with the lithium-ion battery in 2009. Continental AG will supply the battery. Continental chief executive, Manfred Wennemer, said that higher sales volumes are needed to make the technology more widely available.

According to Automobilwoche, Continental will be able to offer similar batteries to other suppliers, without breaching the terms of its arrangement with Daimler. Daimler holds 25 patents for the technology. Continental is system integrator and battery supplier, while the battery cells will come from a joint venture between Johnson Controls of the US, and the French company Saft.

General Motors could also benefit from the technology. GM has already engaged Continental as a development partner for lithium-ion batteries. According to Wennemer, Continental is waiting for a decision on whether it will be asked to supply batteries for series production.

Continental is setting up a line at its plant in Nürnberg to build up to 2,500 batteries a year. However, if demand did rise, Continental could also produce the batteries at other plants in the US, Asia or eastern Europe. The German company sees its role mainly as system supplier and integrator. It is talking to a range of battery cell suppliers to produce the batteries in the future.

Daimler and Continental are convinced that hybrid drivetrains have a big future, particularly in large cars. This is the case both in the US and Europe, and if costs can come down quickly, demand could grow suddenly. Mercedes is already talking about launching a mild hybrid with a lithium-ion battery in the E-Class in 2010, although planned full hybrid version so the M-Class and G-Class will use conventional nickel-hydride batteries.

According to Automobilwoche, Toyota is stepping up development of lithium-ion technology following the Daimler/Continental breakrthrough. Toyota chief, Katsuaki Watanabe, told journalists in Geneva that he had asked his engineers to accelerate development work as much as possible. The company has said it wants to launch a plug-in hybrid with a lithium-ion battery by 2010 at the latest.