Lead acid battery major Exide Industries on Tuesday said its board of directors have approved plans to set up a greenfield multi-gigawatt lithium ion cell manufacturing plant in India.

The automotive and industrial battery company plans to participate in the production linked incentive (PLI) scheme for the national programme on Advanced Chemistry Cell (ACC) battery storage.

The Union ministry of heavy industries has floated a request for a proposal to select manufacturers who wish to set up ACC units under the scheme with the due date at December end.

The scheme, which has a capital outlay of Rs 18,000 crore for a period of five years, envisages to establish a cumulative ACC manufacturing capacity of 50 GWh and an additional capacity of 5 GWh for niche ACC technologies.

A beneficiary firm has to commit a minimum of 5 GWh capacity and 60 per cent domestic value addition within five years from the appointed date.

The Centre anticipates a direct investment of Rs 45,000 crore in ACC battery storage manufacturing projects. According to industry estimates, roughly Rs 700 crore per GWh could be the capital spend on an ACC project.

The decision from Exide to venture into ACC manufacturing according to Exide MD and CEO Subir Chakraborty is on account of the government’s push towards electric vehicle manufacturing which will lead to lithium ion battery based storage solutions gaining prominence.

“Cell manufacturing is an integral part of the lithium-ion battery manufacturing chain and we believe setting up of this plant will enable us to be more competitive and better serve our esteemed customers,” said Chakraborty.

Exide currently has a joint venture with Swiss firm Leclanche SA and a factory has been set up at Gujarat with an estimated investment of around Rs 240 crores for lithium ion battery packs and modules.

Exide scrips setted at Rs 156.50, up 0.77 per cent at the Bombay Stock Exchange, after reaching a high of Rs 163.90 following the announcement.