Ener1 Inc. (HEV), a lithium-ion automotive battery maker, said it will partner with Nissan Motor Co. (7201.TO) to develop new materials designed to improve the performance of electric and hybrid vehicle batteries.

Ener1's manufacturing arm, EnerDel, will work with Nissan to co-fund the development of a new electrolyte liquid, under a deal signed Thursday. Currently, the liquid allows for conductivity between the electrodes but can reduce the lifetime of a battery.

"This project is about continuing the evolution of a critical technology," Ener1's Chief Executive Charles Gassenheimer said in a statement.

Research will be conducted at Argonne National Labs near Chicago. EnerDel currently operates a plant in Indianapolis.

-By Jeff Bennett; jeff.bennett@dowjones.com; 248 204 5542