TORONTO (CP) -- Magna International is marshalling its forces for the battle of the batteries, searching for sites in North America and Europe to build two plants to manufacture the power devices and joining global auto makers in making an expensive wager that electric vehicles will take off later this decade.
The potential investment is between US$400 million and $600 million and production of batteries could begin in 2013, Siegfried Wolf, Magna's co-chief executive, said Tuesday.
The move into battery making positions Magna to take advantage of the boom in hybrid and electric vehicle development that is already under way as auto makers strive to meet aggressive new worldwide regulations for fuel economy and tailpipe emissions that come into force by 2016.
It also puts the Canadian auto parts giant in the thick of a battle between deep-pocketed battery makers that are working to bring down the costs of their products while increasing their range, one of the key issues that will determine the success of electric vehicles.
Magna has "absolutely" won enough business that the construction of two battery plants is necessary, Wolf said.
His comments come at a defining moment for Magna as it seeks shareholder approval for a deal that includes the shift of much of its electric vehicle business into a joint venture between the company and Frank Stronach, part of a larger proposal that includes the company founder trading his class-B multiple voting shares for $300 million in cash and nine million single-vote shares.