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PLI scheme for EV batteries gets nod
The proposal, approved by the Union cabinet chaired by Prime Minister Narendra Modi, comes as the country accelerates steps to switch to electric vehicles (EVs) to curb rampant pollution in its major cities and cut reliance on costly oil imports.
India on Wednesday approved a ₹18,100 crore production-linked incentive (PLI) scheme for building Tesla-style giga factories to manufacture batteries.
The proposal, approved by the Union cabinet chaired by Prime Minister Narendra Modi, comes as the country accelerates steps to switch to electric vehicles (EVs) to curb rampant pollution in its major cities and cut reliance on costly oil imports.
The plan is to set up 50 giga watt hour (GWh) manufacturing capacity for advance chemistry cell batteries by attracting investments totaling ₹45,000 crore, according to the government. One GWh (1,000-megawatt hour) of battery capacity is sufficient to power 1 million homes for an hour and around 30,000 electric cars. Mint reported on September 11 about the ₹18,000 crore package being in the works for battery storage manufacturing.
The scheme titled the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, under the department of heavy industry, may boost India’s green energy credentials. It is among the PLI schemes worth ₹1.97 lakh crore announced by the government last year for 13 sectors. The goal is to create global manufacturing champions in the country and attract firms exploring a China-plus-one strategy for production.
“Each selected ACC battery storage manufacturer would have to commit to set up an ACC manufacturing facility of minimum 5GWh capacity and ensure a minimum 60% domestic value addition at the project level within five years,” the government said in a statement.
The incentive will be paid out on the basis of sales, energy efficiency, battery life cycle, and localisation levels.
“The beneficiary firms have to achieve a domestic value addition of at least 25% and make the mandatory investment of ₹225 crore/GWh within two years (at the mother unit level) and raise it to 60% domestic value addition within five years,” it said.
A manufacturing facility has to be commissioned within two years and the incentive will be disbursed thereafter over five years, the statement added.
