Many manufacturers believe hybrid electric vehicles (HEVs) will be the next generation car. At least, that was the feeling at the recent Tokyo Motor Show held in Makuhari Messe in Japan’s Chiba Prefecture. HEVs offer lower exhaust emissions and high fuel efficiency, satisfying both air quality regulations and consumer demands. The next challenge automakers are facing is the type of battery to make standard for hybrid cars, either nickel-hydrogen or lithium-ion.

Toyota Motor Corporation uses a nickel-hydrogen battery manufactured by Matsushita Battery Industrial Company for its Prius hybrid model, as does Honda Motor Company. However, Hitachi Ltd., along with Nissan Motor Company rely on lithium-ion batteries.

Both batteries have their pros and cons. While nickel-hydrogen batteries have a lower energy density per quantity than lithium-ion batteries, they are considered cheaper and safer. But many believe that the nickel-hydrogen batteries will be the most widely used until 2010. Sanyo Electric Company recently announced that they will mass produce such batteries for hybrid cars.

But high battery prices still pose a challenge for automakers. Some industry analysts predict the next generation car will actually be fuel cells, which are powered by electricity generated by a chemical reaction of hydrogen and oxygen and need a secondary battery to start up.

“Power lithium-ion batteries will have their turn (as a battery used to start cars),” said Tomohide Kazama, a researcher at the Industrial Consulting Department of Nomura Research Institute, Ltd.