Japan's GS Yuasa Corp has said it will hike production capacity at its automotive lithium battery joint venture with Mitsubishi Corp and Mitsubishi Motors by 70% to meet booming orders.

The three partners in Lithium Energy will spend JPY20-30bn (US$260m to $390m) building a second factory that will be able to make 4.4m battery cells a year - enough to power 50,000 electric vehicles, a GS Yuasa spokesman told Reuters.

Auto makers have slashed electric vehicle prices as the cost of producing batteries falls, increasing demand for pure electric cars.

The new plant, to go online around 2014 in Shiga Prefecture, western Japan, would hike the joint venture's total output capacity to supply 120,000 electric vehicles a year.

Lithium Energy, which is building another factory to begin operations in April next year, is hurrying to meet demand from carmakers in Japan and Europe for zero-emission vehicles.

The joint venture now makes car batteries at small factories in Shiga Prefecture and Kyoto and has an annual output capacity for about 18,000 vehicles, expected to hit 70,000 units in April.

GS Yuasa holds 51% of Lithium Energy, while Mitsubishi Corp has a 41.9% stake and MMC 7.1%.