November 24, 2023
The production-linked incentive (PLI) scheme focused on advanced chemistry cells (ACC) covers a 20-GWh capacity
In the first round of awards, three companies secured incentives
In the upcoming round, the government is unlikely to relax the criteria for localisation of cell manufacturing
The government anticipates increased participation, with over 15 applicants expressing interest
The government is preparing to initiate the tender process for the production-linked incentive (PLI) scheme focused on advanced chemistry cells (ACC) with a 20-GWh capacity by December 2024.
This development presents an opportunity for those ineligible in the initial round or who could not apply to benefit from incentives to bolster battery storage capacity in India.
The Ministry of Heavy Industries is expected to finalise consultations with the Ministry of New and Renewable Energy by December, paving the way for the application process for new bids.
In the first round of awards, three companies secured incentives: Ola Electric for 20GWh lithium-ion cell manufacturing, Reliance New Energy for 5GWh sodium-ion cell manufacturing, and Rajesh Exports for 5GWh lithium-ion cells. These companies committed a combined investment of INR 27,000 crore for the scheme.
However, the 20 GWh capacity initially awarded to a Hyundai company was later deemed invalid, leading to a new round of bidding.
In the upcoming round, the government is unlikely to relax the criteria for localisation of cell manufacturing, which starts at 25% in the first year and increases to 60% in the fifth year of production. The minimum bidding capacity is expected to remain at 5GWh. The government anticipates increased participation, with over 15 applicants expressing interest.
The central government is also considering additional incentives for a new PLI scheme covering niche chemistries like solid-state, zinc-based, and iron-air batteries. Approval for incentives for a capacity of 5GWh is expected next year.
Suzuki Motor Co. and Tata Motors, which committed INR 7,300 crore and INR 13,000 crore to cell manufacturing units in Gujarat, may participate in the second bidding phase if there are changes in localisation criteria or penalty provisions. Global lithium-ion battery firms such as Panasonic, Samsung, and LG Chem, which did not participate in the first round, may join the ACC PLI scheme.
Some of these players and domestic battery firms like Amara Raja and Exide, which were wait-listed earlier, are expected to submit fresh bids. India, heavily reliant on foreign markets for lithium-ion cells for electric vehicles, imports cells primarily from China, South Korea, Germany, and Japan. In the previous ACC PLI scheme, the ministry received ten bids from companies with a manufacturing capacity of 128 GWh.
Source: Mint