Mitsubishi Motors on March 2 said it had reached a basic accord with PSA Peugeot Citroen to jointly build electric cars for the European market.

The companies will develop a new car based on Mitsubishi's i MiEV electric vehicle. Mitsubishi will be in charge of manufacturing the vehicle, which will be sold under the Peugeot and Mitsubishi brands from late 2010 or early 2011.

Mitsubishi will launch its i MiEV in Japan this year and is considering sales in the U.S. and other markets later.

The two companies have carried out a feasibility study on development and production of key parts for small electric vehicles since last June.

PSA Peugeot Citroen is the largest global manufacturer of electric vehicles, with more than 10,000 units sold.

Copyright Agence France-Presse, 2009