While Ford is working on the liquid fuel part of the hybrid equation, other carmakers are focusing on battery technology to take hybrid vehicles to the next level.

BusinessWeek reports that Japanese automakers Subaru, Nissan and Toyota are all planning to make the jump from today's NiMH batteries (used in the Ford Escape battery pack shown at right) to Lithium-Ion batteries in the near future. The magazine reports Subaru will roll out a Li-ion hybrid next year, and the next-generation Prius (in 2008 or 2009) may also make the jump to Li-ion cells.

Japanese automakers are aggressively partnering with battery makers - Toyota owns 60 percent of Panasonic EV Energy, while Subaru (partly owned by Toyota through its stake in Fuji Heavy, Subaru's parent) is partnered with NEC. Sanyo, the world's leading Li-ion battery manufacturer, supplies hybrid power systems to Honda and Ford.

Why the fuss? Li-ion batteries offer light weight, high energy density and high power, all major advantages for automotive applications. There are hurdles to overcome - safety concerns will require bulletproof fail-safe technologies, Li-ion batteries have a comparatively short life, and they are more expensive than equivalent NiMH batteries.

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