The facility will make lithium-ion batteries for hybrid car models in domestic and international markets, and will be set up jointly by Suzuki, Toshiba Corporation and Denso at a proposed investment of USD 180 million.
"We don't foresee any major threat. The batteries are meant for engines, which is only a small part of the total battery requirement of a vehicle. Lead acid batteries would continue to be used for others parts like doors and windows," sources at Exide Industries told PTI.
Lithium-ion batteries are also costly compared to lead acid batteries, which will likely limit their use in a price-sensitive market like India, they said.
It has an annual capacity to produce about 42 million units of automotive and motorcycle batteries.
Exide Industries plans to initially source cells for the lithium-ion batteries, and at a later stage, look at manufacturing, which would require an investment of Rs 800 crore, Managing Director and CEO Gautam Chatterjee had recently said.
He said the company is at the same time working to develop batteries that would consume lesser lead, a key but costly input.
"We are jointly developing bi-polar lead acid batteries with US-based Advanced Battery Concept (ABC). This will be a disruptive technology and consume 30 per cent less lead than current batteries," Chatterjee said.
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