Audi CEO Rupert Stadler yesterday revealed a production electric vehicle from Audi was still at least five to ten years away, but that doesn’t mean the Ingolstadt-based carmaker isn’t investing in the technology. According to latest reports Audi and Japanese electronics giant Sanyo are planning to work together on a new pilot hybrid project for the Volkswagen Group.

The partnership will see the development of advanced battery technology and electronic components that will eventually make their way into a number of VW models. According to a report in Germany newspaper Süddeutsche Zeitung, the two companies will invest a combined €1 billion on the project.

VW’s hybrid program has fallen behind many of its rivals because of a decision made by its CEO Martin Winterkorn to focus on more efficient internal combustion engines to help reduce fuel consumption. His predecessor, Bernd Pischetsrieder, had plans for a range of hybrid vehicles but Winterkorn saw the €2,000 cost of a hybrid vehicle over a conventional vehicle as too high and the business case too weak.

Wolfgang Hatz, responsible for R&D at Audi, has also said in the past that although hybrids can deliver carbon savings, particularly from urban use, they are an expensive solution. Executives have so far confirmed that a hybrid Audi Q7 and VW Touareg will be built but there aren’t any plans for other models in the pipeline.