Shares of Mitsubishi Motors jumped to a three-month high on Friday after a newspaper said the automaker would double its annual production capacity target for electric cars in the business year to March 2012.
The Japanese carmaker will aim to build up to 20,000 of its i-MiEV electric cars and more than double the output of lithium ion batteries, the Nikkei business daily said.
Its shares opened up 7.3 percent at 147 yen before ending morning trade at 144 yen.
Mitsubishi Motors is up against bigger rivals Renault and Nissan Motor , the Franco-Japanese alliance that is aiming to be the first to mass-market zero-emission electric cars, starting with an initial limited roll-out in 2010.
Renault has said it wants to sell 20,000 to 40,000 electric cars in 2011, while Nissan has disclosed no target.
Other global automakers have joined the race, with Toyota Motor saying this year it plans to roll out pure electric cars by 2012.
Mitsubishi Motors, the only mass-volume carmaker with an electric car prototype on the road, is on track to begin selling its egg-shaped i-MiEV electric car to corporate customers in Japan from July.
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President Osamu Masuko, who is chauffeured around in the i-MiEV daily, has said production will be doubled to 4,000-5,000 cars in the second year as exports begin, moving up to 30,000 to 50,000 by the middle of the decade.
A Mitsubishi Motors spokesman would not confirm the report, saying the company stood by its target of hitting 10,000 units as soon as possible.
Mitsubishi Motors is focusing on small and fuel-efficient cars to ride out the global slump, and has lined up requests from companies such as Tokyo Electric Power and Japan Post for its first batch.
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It also has a deal to supply electric cars to France's PSA Peugeot Citroen for the Peugeot brand.
"Still, 20,000 seems a little steep," said the spokesman.
A lithium ion battery joint venture between Mitsubishi Motors, GS Yuasa Corp and Mitsubishi Corp will invest roughly 3 billion yen ($30 million) to more than double capacity at a plant in Shiga Prefecture, western Japan, to 5,000 units a year by autumn 2010, the paper also said.