Abstract Rechargeable alkaline nickel–metal hydride (Ni–MH) batteries have recently started to penetrate the consumer battery market. In contrast to the widely used Ni–Cd batteries they display up to 50% higher storage capacity and, due to the absence of Cd, an improved environmental compatibility. The electrochemically active material at the negative electrode is a hydrogen storage alloy. In most commercial applications so-called AB 5 alloys having a CaCu 5 type crystal structure have been used so far. These commercial AB 5 alloys are usually of the type Mm(Ni,Co,Al,Mn) 5 , containing typically 10 wt% Co. Mm denotes Mischmetal, a cost-effective mixture of the rare earths La, Ce, Pr and Nd. The large amount of Co is added to produce an alloy with a reasonable cycle life, but increases the alloy cost considerably. The Ni–MH system is considered as a promising energy source for pure electric vehicles and hybrid cars. However for this application it is necessary to decrease the Co content in these alloys without diminishing the cycle life endurance. Hydrogen storage alloy production by gas atomisation represents a promising way to achieve this goal.