Toyota is reportedly planning to buy lithium-ion batteries for its hybrids from Sanyo Electric.

The Kyodo news agency reports that the move is part of an effort to widen supply sources of batteries for its increasingly popular hybrid models.

Sanyo, which is scheduled to become a wholly-owned subsidiary of Panasonic Corp., also supplies nickel metal hydride batteries for Honda Motor Co.’s Insight hybrid.

Toyota plans to install Sanyo’s lithium-ion batteries, which are lighter and more powerful than the nickel metal hydride batteries currently used in the Prius and other Toyota hybrid models, in the minivan-type hybrid it is expected to launch as early as in 2011.

At first, it is likely to procure battery supplies for around 10,000 units per year, sources told Kyodo.

Toyota may also use them in plug-in hybrids or fully electric vehicles, the report added.

The report notes that battery production has lagged behind orders for the new best-selling Prius – currently Japan’s highest selling model. That has meant extended waiting lists and orders in Japan taken now for the Prius cannot be fulfilled until the end of March.