Japan’s Hitachi Ltd., Hitachi Maxell Ltd and Shin-Kobe Electric Machinery Co. Ltd reportedly said on Wednesday they had formed a joint venture to make rechargeable lithium-ion batteries for hybrid cars.

According to Reuters, the venture, aimed at tapping into the growing market for hybrid vehicles and capitalised at 1.5 billion yen ($US13.86 million), is owned 43.7% by Shin-Kobe, 36.7% by Hitachi and 19.6% by Hitachi Maxell.

The report, citing a spokesman at Hitachi, Japan’s largest electronics conglomerate, said that nickel metal-hydride batteries are currently used widely for hybrid cars, such as Toyota‘s Prius, but lithium-ion batteries have a higher energy density, making it possible to manufacture smaller and lighter products.

He reportedly declined to comment on sales targets for the joint venture, Hitachi Vehicle Energy Ltd.

Reuters added that Shin-Kobe is a major manufacturer of batteries and plastic products, while Hitachi Maxell, a Hitachi subsidiary, makes CDs, DVDs and lithium-ion batteries for mobile phones.