UPDATE 1-GS Yuasa shares soar; targets extended-range EV battery for 2020

* GS Yuasa says targeting double-range battery around 2020

* Shares rise 10 pct

* Electric cars seen taking off in Europe, China (Recasts with company, market comments, background on EV market)

TOKYO, Aug 8 (Reuters) - Shares in Japan's GS Yuasa Corp surged 10 percent on Tuesday after the Nikkei business daily reported the company would begin mass-producing a new lithium-ion battery that would double the range of electric cars as early as in 2020.

Electric vehicles have gotten a boost as a greener alternative to conventional cars as European governments move to ban the sale of gasoline and diesel cars over the next few decades. China has already touted EVs as its choice for zero-emission cars, forcing global automakers to embrace the technology.

But limited driving range, long charging times, and the high cost of batteries are major hurdles preventing electric cars from becoming mainstream today.

GS Yuasa has said it was working on a lithium-ion battery that would double the range of its current battery at similar prices, targeting production around 2020. But a spokeswoman said the company was not ready to announce anything final, including where it would produce the batteries or which automakers it would supply.

"In addition to domestic automakers, we would hope to supply European ones as electric vehicles are expected to take off there," she said.

GS Yuasa's stock jumped as much as 15 percent before paring gains to 10 percent, giving it a market value of 235 billion yen ($2.1 billion). The broader Tokyo market was down slightly.

"Anything related to electric vehicles is of strong interest to investors now," said Yoshihiro Okumura, general manager at Chibagin Asset Management.

"As companies prepare for the shift (towards EVs in Europe), investors are also looking to spot the right stocks. They don't want to fall behind."

The Nikkei said Lithium Energy Japan - GS Yuasa's joint venture with Mitsubishi Corp and Mitsubishi Motors Corp - would produce the batteries at its factory in Shiga prefecture, western Japan.

GS Yuasa's domestic rivals such as Panasonic Corp, which supplies to Toyota Motor Corp and Tesla Inc , are also racing to develop next-generation batteries.

Toyota said last month it was developing an all-solid-state battery that would significantly boost the driving range and reduce charging times, aiming for commercialisation in the early 2020s. ($1 = 110.6200 yen) (Reporting by Chang-Ran Kim and Ayai Tomisawa; Editing by Edwina Gibbs)