UPDATE 1-Toshiba to build $273 mln lithium-ion battery plant

* Initial capacity to be 500,000 cells per month

* Plant would more than quadruple Toshiba's SCiB capacity

* To go onstream in spring 2011 (Adds details, background, share price)

TOKYO, Oct 28 (Reuters) - Japan's Toshiba Corp (6502.T) said on Tuesday it would invest 25 billion yen ($273 million) to build a new lithium-ion battery plant in northern Japan, eyeing growing demand for batteries used in electric vehicles.

The plant, to be built in Kashiwazaki, Niigata Prefecture, will have an initial capacity of 500,000 cells per month, more than quadrupling Toshiba's capacity when the plant goes onstream in the spring of 2011.

Toshiba now makes its rechargeable SCiB (Super Charge ion Battery) at another facility in central Japan, which has monthly capacity of 150,000 cells.

"We hope to raise capacity at the new plant to several million in a few years, as electric vehicle demand grows starting in 2011/12," spokesman Ken Shinjo said.

Shares of Toshiba were down 4.2 percent at 521 yen, underperforming a 1.5 percent fall in Tokyo's electrical machinery index .IELEC.T.

Toshiba the previous day revised up its first half and second quarter guidance to an operating profit instead of a loss, but it kept its annual outlook below the market consensus. [ID:nT297517] ($1=91.63 Yen) (Reporting by Mayumi Negishi; Editing by Chris Gallagher)