OSAKA -- Sanyo Electric Co. will exclusively supply battery systems for Ford Motor Co.'s first hybrid electric vehicles (HEV), which will appear on roads in 2003, the two firms announced Friday.

Sanyo, a leading manufacturer of rechargeable batteries, will supply the 300-volt nickel-metal hydride traction battery pack and controller for the Ford Escape HEV. The vehicle is designed to be the cleanest and most fuel-efficient sport utility vehicle, they said.

While other automakers, including Toyota Motor Corp. and Honda Motor Co., have developed low-emission vehicles, Ford's will be the first sport utility vehicle.

Ford plans to sell between 15,000 and 20,000 units per year, initially in the U.S. and Europe.

"Sanyo was selected as the exclusive battery supplier because of the company's proven track record in the consumer electronics industry and commitment to high quality and reliability," Prabhakar Patil, Ford Escape HEV chief program engineer, said at a joint press conference.

The batteries Sanyo will supply have such features as higher power output, improved efficiency when recharging at high temperature and improved storage quality, according to Sanyo officials.

Toshimasa Iue, president of Sanyo Soft Energy Co., said Sanyo plans to expand its rechargeable battery business by developing new applications for the HEV, the market for which is expected to grow in coming years due to increasing concerns for the environment.

"We expect that the HEV market will grow from 60,000 vehicles in 2001 to 800,000 in 2007 worldwide," Iue said.

While the two companies began negotiations in December 1996 on the deal, they said they hope to continue and expand the relationship, although no specific plans were revealed.