NiMH batteries for a hybrid car, Toyota Prius, that PEVE manufactures spent ten years to achieve one million battery packs in total production (in a vehicle base) from the establishment of the company (1996), but it took only two years to reach two million battery packs. Hybrid cars are rapidly spreading in the world market, and the demand for in-vehicle storage batteries grew rapidly.
PEVE was forced with a large production increase and decided to construct a new factory, and concluded a siting agreement with Miyagi Prefecture and Taiwa Town in 2008. The factory building was quickly completed after one year and a half.
"Although we started with one production line, we plan to extend to three lines by September 2010 to have a production capacity of 300,000 battery packs," said President Hayashi. Thus PEVE will have annual production capacity of 110,000 battery packs in total: 400,000 battery packs in each of the two existing factories in Shizuoka Prefecture and 300,000 battery packs in the Miyagi Plant.
Why did he decide to locate the new factory in Miyagi Prefecture? "There were two indispensable conditions that the site must have. One is that we can ensure excellent employees and the other is we can construct a factory building promptly," he said. We listed industrial complexes all over Japan from Hokkaido to Kyushu, selected major candidates, and finally chose Taiwa Town in Miyagi. As the background, in addition to having many talented people and convenient physical distribution, Miyagi Prefecture flexibly responded to them, “The site was originally a logistics park. But Miyagi Prefecture changed the use and then developed the infrastructure such as an industrial waterway for us to enter the park," President Hayashi recalled.
There was not only substantial support in the system such as subsidies for the sited company, reduction in capital investment depending on number of homegrown employees, and preferential treatment for depreciation, but there was also detailed assistance such that the Prefecture offered classrooms of prefectural schools in Miyagi for examination rooms when recruiting employees, which began from before factory construction. "I fully realized that all Miyagi was very desirous of our company locating in the area."

President Hayashi is highly motivated also to build a coalition with local businesses. "Since we came here, our mission was to contribute to the area. We plan to procure parts and others from Miyagi as much as possible." For example, they order the battery cases from an electronic components manufacturer in Ishinomaki.
There is, however, no manufacturer who has the experience in manufacturing batteries in Tohoku, and the technological capability may be an unknown factor. "Because they will have a technical association with our company to manufacture the parts, it is desirable to be a manufacturer with high ability to absorb technology. It is also important to have strong enthusiasm to enter into the next auto industry where hybrid cars serve as a standard," said President Hayashi. He is waiting eagerly for a manufacturer to actively propose; "Our company has the technology and the human recourses so that we can do this."
When hiring employees, they have "from local" as a rule, and most of the initial 450 employees were from Miyagi. "They are honest, polite, and positive to technological acquisition. They grow easily." He admired the personal character and nature of the people from Tohoku. Responding to the factory line expansion, they will recruit about 100 employees by September, 2010. They plan to employ mainly local people also this time.
President Hayashi expects to promote cooperation with Tohoku University in Sendai. The University's School of Engineering has achieved remarkable research results on motors, metal materials, etc., and intends to concentrate on the field of electricity or batteries. University President Inoue told President Hayashi, "We hope to keep your consultation about research and development coming." Tohoku University has produced a large number of many excellent people and is close. It was one of the big charms when entering into Miyagi.

In recent years, a Li-ion battery that is lightweight and has high electricity storage capacity is attracting more attention. PEVE also produces Li-ion batteries in the Toyota factory in Aichi Prefecture. The batteries are planned to be used for plug-in hybrid cars that can be recharged from a household outlet.
President Hayashi, however, thinks that Li-ion batteries still have few records for runs used in commercial cars and at the present stage, there is no telling whether it will be the main next generation battery to be replaced with a NiMH battery, "Since its evaluation in the market should be established within two to three years, if the needs increase we will consider full-scale production of Li-ion batteries.
If not, we will concentrate our efforts to produce NiMH batteries as before." He has a flexible view for the future of the battery market.
"Anyway, it is sure that eco-friendly cars, such as hybrids and electromobiles, will become a centerpiece of the future automotive society. The demand for storage batteries for vehicles should increase more and more. I think, only as my personal opinion, until a "third battery" that surpasses the existing batteries in all aspects, such as power storage capacity, weight, durability, and cost are developed, a NiMH battery may continue to be a mainstream battery. Our company will answer such demand of the market without fail," said President Hayashi.
The site of the Miyagi Plant is about 62.5 acres. If a production line is extended to the maximum, it is possible to produce 2,100,000 NiMH battery packs a year. Although they only manufacture the batteries for Toyota Prius now, in the future, President Hayashi expects to also supply Toyota cars other than Prius, and auto manufacturers other than Toyota.
"Batteries manufactured in Miyagi may be shipped overseas from Sendai Port. Then the Miyagi Plant will function not only as a production base but also as a base of export." said President Hayashi. Miyagi Prefecture, which PEVE chose, has various "geographical advantages" to satisfy their strategies.