Mitsubishi has been developing the iMiEV car since 2005, planning to launch sales to fleet customers such as rental car companies beginning in mid-2009 and to the general public in 2010.
The lithium-ion battery for the car will be produced by Lithium Energy Japan, a subsidiary of Japan's biggest battery maker, GS Yuasa Corp., at a newly acquired site in Shiga in western Japan, the companies said in a statement.
GS Yuasa is already providing lithium-ion batteries to customers including Boeing, which uses them in its 787 jets.
Mitsubishi initially planned to produce batteries for 2,000 iMiEVs in 2009 and 5,000 the following year at GS Yuasa's existing factory in Kyoto.
But the company changed its plans in order to boost production targets to meet rising demand for electric cars amid soaring fuel prices and the growing appeal of environmentally friendly products, the automaker said.
A new battery plant will be ready in April 2009 to initially produce batteries for 2,000 units of the electric car, Mitsubishi said. The company will then boost battery production up to 10,000 a year "shortly afterward," but did not specify the exact timeline for a planned production increase.
The move is part of a race among automakers to develop mass-market electric cars.
Nissan Motor Co. and Japanese electronics maker NEC Corp. are working together to produce batteries for electric vehicles, and Honda Motor Co. is leasing a fuel-cell vehicle in California.
U.S. automaker General Motors Corp. is developing a plug-in electric vehicle called the Chevrolet Volt, which it hopes to launch in 2010. Ford Motor Co. has a demonstration fleet of 20 plug-ins through a partnership with Southern California Edison.