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Shares in Panasonic, the world’s top producer of automotive batteries, rose on Wednesday ahead of a press conference where the company was expected to announce a tie-up with Toyota for batteries used in electric vehicles.

The two companies had been negotiating final details on an agreement that is likely to draw in Toyota subsidiary Daihatsu and Mazda, which agreed to a capital partnership with Toyota to develop EVs, the Nikkei (publisher of the Financial Times) reported on Wednesday.

Toyota and Panasonic announced they would hold a joint press conference in Tokyo later today.

Panasonic already supplies lithium-ion batteries for Toyota’s hybrid vehicles, such as the Prius, but has carved out a name for itself in the automotive battery industry as the major supplier to Tesla.

Toyota is generally seen as being a late adopter of pure EVs that are being promulgated by rivals such as Nissan, Volkswagen and Tesla, and has instead plumped for hybrid vehicles and hydrogen fuel cell technology.

In August, the Nagoya-based carmaker agreed to a capital partnership with Mazda and auto parts supplier Denso to jointly set up a production plant in the US and collaborate on the development of core EV technologies. Incoming regulations in China and California, among others, are forcing carmakers to offer EVs in order to sell their products in those markets.

For Panasonic, a partnership with a carmaker of Toyota’s scale would help cement its position as the leading producer of automotive batteries.

Panasonic shares were up 0.8 per cent at the end of the morning session in Tokyo, while Toyota was up 0.6 per cent, versus a 0.1 per cent decline for the Topix benchmark.

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