HWASEONG, South Korea (Reuters) - Hyundai Motor Co. plans to start selling its first battery-powered electric vehicle (EV) in 2016 as South Korea's champion of fuel-cell cars hedges its bets in next-generation green technology.

Hyundai has leant toward engines which turn hydrogen into electricity in response to stricter emissions regulations in markets such as the U.S. Research and development partner Kia Motors Corp. has focused on rechargeable batteries.

But the division of labor is blurring at a time when the number of battery-powered EVs is on the rise. BMW's i3 and Nissan Motor Co. Ltd's Leaf are widely expected to reach Korea this year - as will Kia's Soul EV.

"There is no clear direction about which eco-friendly cars will win. We are dividing roles of Hyundai and Kia, with Hyundai launching fuel cell cars and Kia focusing on electric cars," Senior Vice President Lee Ki-sang told reporters on Tuesday.

"But the time will come when Kia will introduce a fuel-cell car. Hyundai is also preparing to launch a (battery-powered) electric car in 2016," Lee said at the Korean launch of the Soul


Kia, 34 percent owned by Hyundai, on Tuesday said it will start building the Soul EV compact in Korea next month. The car will be the pair's first battery-powered EV export, with destinations including the United States and Europe.

For this year, the global sales target is 5,000 Soul EVs, said Cho Yong-won, vice president of Kia's Domestic Marketing Group.

In Korea, the Soul EV will cost about half of its 42 million won ($39,400) price tag after government subsidies, similar to the higher-end model of the gasoline version.

The car can run up to 148 kilometers (92 miles) per 24 to 33 minute fast charge or four hours on slow charge.

Relatively short driving ranges and a lack of charging stations, as well as the high cost of batteries, has kept the battery-powered EV market niche.

Korean sales of Kia's Ray EV, Renault SA's SM3 EV and General Motors Co's Spark EV totaled just 713 vehicles last year, industry data showed. Hyundai's BlueOn is only used by government agencies.

($1 = 1066.5000 Korean won)

(Reporting by Hyunjoo Jin; Editing by Christopher Cushing)