Volkswagen and its premium Audi unit both have deals with Japan's Sanyo
to supply lithium ion batteries for future hybrid and electric vehicles. Apparently that's not good enough for VW's Chinese operations. The German automaker is looking for a Chinese supplier to provide batteries locally for the cars it produces there. Volkswagen China vice president Xu Jian told an interviewer at a conference that the company expects the pace of development for hybrid and electric vehicles to exceed internal combustion engines in the next decade. If VW wants to be competitive in China, the company will need to source components like batteries from local suppliers rather than importing them from Japan. In spite of development efforts, Xu expects hybrid and electric vehicles to only make up 20 percent of the market by 2020.