IBM may be approaching a breakthrough in battery technologies the auto industry is looking forward to.

The company will begin a project to develop lithium metal-air batteries that perform 10 times better, are lighter and more compact than today's lithium-ion batteries.

For the project, IBM's Research unit will partner with U.S. laboratories to develop a technology that uses lithium metal to react with oxygen in the air, resulting in a storage capacity of more than 5,000 watt-hours per kilogram, more than ten times the capacity of today's lithium-ion batteries.

A battery with this technology is expected to run for 500 miles, IBM said according to MIT.

With all foreseeable developments, lithium-ion batteries are only going to get about two times better than they are today, said Chandrasekhar Narayan, manager of science and technology at IBM's Almaden Research Center according to the Massachussetts Institute of Technology Review today.

To really make an impact on transportation and on the grid, you need higher energy density than that, he added.

IBM would likely commercialize the lithium metal-air batteries within five years, according to the report. It is working on a proposal to request funding from the U.S. Department of Energy to fund the research, MIT said, though the amount it is seeking was not disclosed.