PSA and Mitsubishi weigh up electric vehicles.

Peugeot, Citroen (PSA group) and Mitsubishi Motors Corporation (MMC) confirmed on Tuesday they had agreed to start a feasibility study on an extended technical collaboration in the field of electric powertrains.

Japan's Nikkei business daily, which frequently breaks such stories a day or so ahead of official announcements, had on Monday reported that MMC, which is aiming to be the first major automaker to bring an electric vehicle to the mass market, would provide its French partner with technology for conversion of electricity into drive power and the prevention of battery.

The paper said Mitsubishi Motors would supply lithium-ion batteries to Peugeot and the two automakers may also explore the possibility of forming a joint venture to produce electric vehicles.

Tuesday's official announcement said the project, which will run over several months, relates to the development, manufacture and use of an electric powertrain for small urban vehicles.

"To step up the viability of electric vehicle projects and accelerate market introduction, the companies agreed that cooperation on electric vehicle development and production would be mutually beneficial," the two automakers said in a statement.

A week ago they laid the first stone of their joint Russian factory, in Kaluga (180km south west of Moscow).

PSA Peugeot Citroen said the new agreement lies within the scope of its strategy and ambition plan covering 2010-2015, "which should maintain the PSA group's leadership in environmentally friendly cars".

PSA said it is the largest global manufacturer of electric vehicles to date with more than 10,000 units sold and will bring its expertise in the field of electric powertrains to the joint project.

MMC said the agreement is consistent with its electric vehicle strategy.

It is aiming to become one of the leading car manufactures of electric vehicles and has prioritised development of the i MiEV 1 new-generation electric vehicle for introduction to the Japanese domestic market in 2009 and is "considering a possible future" introduction in Europe and the US.

MMC has also set up Lithium Energy Japan, a joint venture with GS Yuasa and Mitsubishi Corporation, which is to supply large capacity and high performance lithium ion batteries for the i MiEV.

Preparation for mass-production of the batteries is going smoothly, MMC said today.

"Carmakers cannot act quickly enough to speed up the development of EVs, as recent improvements, particularly in lithium ion battery technology, has placed battery-electric cars at the forefront of the race to develop extremely low-emission, or even zero-emission cars in the short to medium term," Global Insight automotive analyst Rebecca Wright said in a research note late on Tuesday.

"Of course, there are still massive technical barriers to overcome, even though battery technology has improved greatly over the last couple of years, carmakers and suppliers must further reduce the size and cost of batteries, whilst increasing their range and safety credentials.

"There are also many unanswered questions, such as whether all-electric cars really can be considered ultra-low-emission if the electricity used to charge them comes from coal-fired power stations or whether the emissions are simply being displaced, for example.

"Currently, there is also a lack of the kind of widespread plug-in recharging infrastructure that would be needed to take EVs into the mainstream."

Wright also noted that PSA executives had recently described Renault's EV launch date as unrealistic and suggested vehicles from the PSA-MMC alliance would launch in the 2012-2015 timeframe.