India Explores Incentives to Expand EV Battery Manufacturing

The battery manufacturing sector has been pursuing incentives for the manufacturing of parts such as cathodes, anodes, electrolytes, and adhesives. The government is contemplating offering incentives for the production of battery components to expand the thriving electric vehicle sector and address the rising demand for energy storage.

The Ministry of Heavy Industries is currently identifying battery components produced locally that require financial assistance, ET has discovered. This might resemble the subsidies provided under existing production-linked incentive programs for specific sectors.

The Centre revealed a funding scheme for the viability gap of battery energy storage systems (BESS) for 4 GWh by the year 2030-31, allocating a budget of ₹3,760 crore, which is currently under implementation.

For instance, manufacturing graphite to the anode is easier so the incentive amount can be lesser than that for the cathode, an industry official said.

In 2021, the Centre initiated the National Programme on Advanced Chemistry Cell (ACC) Battery Storage to achieve a production capacity of 50 GigaWatt Hour (GWh) for ACC and 5 GWh for Niche ACC, with a financial allocation of ₹18,100 crore. The PLI initiative focuses on decreasing reliance on imports by enhancing the domestic infrastructure for electric mobility and battery storage.

The initial round of ACC PLI bidding was finished in March 2022. Ola Cell Technologies secured the largest portion of 20 GWh capacity. ACC Energy Storage, bidding under Rajesh Exports, and Reliance Industries received incentives for 5 GWh each. The contract with chosen beneficiary companies was signed in July 2022.

An additional 20 GWh of incentives was first granted to a company identified as pretending to be the Korean automaker Hyundai Motor Company. This designated capacity was recently, and half of it was re-bid in 2024. RIL came out on top in this round, capturing the complete incentive on offer.