Sanyo to Help Lenovo Shoulder Battery Burden

In statements made to the AP, Reuters, and other services this morning, spokespersons for Sanyo said they would help bear the cost of Lenovo's recall of an estimated 205,000 lithium-ion notebook computer batteries sold worldwide, whose risk of overheating and explosion was determined yesterday to be too tenable.

Sanyo has not said exactly how much of the cost it would bear, so it's not clear whether that question was left unanswered or simply unasked.

The history of overheating Li-ion batteries in notebook computers from many manufacturers is actually quite extensive, though multiple specific instances last year of Sony batteries exploding helped cast the problem under a much brighter spotlight.

Yesterday's advisory from the US Consumer Product Safety Commission triggered a selloff of Sanyo stocks on the Tokyo exchange, where they lost 2.7% of value on the close; and of Lenovo stocks on the Hong Kong exchange, where they lost 5.6%.

Analysts pointed out to Reuters this morning that Sanyo was already in hot water, having recently discovered it failed to account for about USD $1 billion in losses from subsidiary divisions in 2004. But Sanyo could be impacted in more than just share declines and financial restatements, but technologically as well: The company had been making a major push to develop Li-ion batteries for hybrid automobiles, in a country where the search for alternative fuels appears to be of much more critical concern than in the US.

With Japanese citizens being treated to images of exploding Sanyo batteries, cast in the same derogatory framework as 2006's Sony battery debacle, the possibility exists that Sanyo may have already lost favor with potential hybrid auto partners such as Subaru, whose hybrid vehicle concept cars run on Li-ion cells.

Another awkward computer glitch affecting up-to-the-minute reports from Asian markets - which contributed to global stock selloffs this week, including in the US - prevented BetaNews from retrieving updated quotes from Sanyo and Lenovo this afternoon.