German carmaker Volkswagen and Japan's Sanyo Electric Co will jointly develop a lithium-ion bat tery to be used in hybrid and electric cars, the Nikkei Financial Daily reported on Sunday. Volkswagen will aim to start importing and using the battery in its hybrid and electric cars by 2012, the Nikkei said. Sanyo makes nickel-hydrogen batteries that can be recharged repeatedly and Volkswagen and subsidiary Audi AG in the Volkswagen Group's first hybrid model to be rolled out as early as next year will use the batteries. But the lithium-ion battery to be jointly developed would be smaller and lighter than nickel-hydrogen batteries, enabling the car's weight to be cut by 200-300 kilograms, the Nikkei said. The new battery would also allow the car to have better fuel efficiency and acceleration, it added. Sanyo, which has the biggest global share of lithium-ion batteries used in personal computers and mobile phones, plans to invest nearly 100 billion yen ($973 million) to make and develop them over the next three years. The move comes after plans by Nissan Motor Co and NEC Corp to start massproducing lithium-ion batteries, considered more environmentally-friendly than nickel-hydrogen ones. Automotive Energy Supply Corp. (AESC), an equally owned joint venture of Nissan and NEC established in April 2007, will produce the batteries beginning early next year, the newspaper said. The two companies plan to spend 20 billion yen ($194 million) to build a plant in Kanagawa Prefecture, south of Tokyo, the Nikkei said. The venture will mass-produce enough lithium-ion batteries for 10,000 electric vehicles at the initial stage and plans to raise production capacity by six-fold in the future, it said.