Bosch to get VW contract for EV batteries

Reuters (Stuttgart) - German automotive supplier Bosch [ROBG.UL] is set to receive a major contract to develop electric car batteries for Volkswagen (VOWG_p.DE), a person familiar with the matter told Reuters on Wednesday.

Awarding Stuttgart-based Bosch the contract would give VW a second battery supplier next to Japan's Sanyo (6752.T). Both VW and Bosch declined to comment on the matter.

Global automakers are accelerating plans to electrify their cars through gasoline-electric hybrids, plug-in hybrids and pure electric vehicles to stay competitive as governments around the world tighten emissions and fuel economy standards.

Volkswagen has said it plans to launch all-electric vehicles in 2013 and expects these zero-emission vehicles to account for 3 percent of its sales by 2018.

But two major challenges that carmakers face to mass producing electric vehicle are the high cost of the batteries and the limited range of all-electric vehicles.