Rs 180 bn PLI Scheme for battery making to bring down EV cost

The implementation of the PLI Scheme 'National Programme on Advanced Chemistry Cell Battery Storage’ will bring down the cost of electric vehicles and boost green growth.
Rs 180 bn PLI Scheme for battery making to bring down EV cost
New Delhi

The industry has welcomed the Cabinet’s decision to implement the Production Linked Incentive (PLI) Scheme for 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage’. This PLI scheme will achieve a manufacturing capacity of 50 GWh of ACC and an additional 5 GWh of niche ACC with a Rs 181 billion overlay.

ACCs can store electric energy in the form of chemical or electrochemical energy and convert it back into electric energy when needed. Many sectors such as electric vehicles, solar rooftop, consumer electronics, and advanced electricity grids use this technology.

Despite many companies have started investing in these battery packs, the production capacity in the country remains quite low as compared to global averages. As of now, most of the demand for ACC in the country is met through imports. The new scheme will help in preventing the dependency on imports and will also support the Atmanirbhar Bharat initiative.

According to the government, the incentive will be paid out based on the energy efficiency, sales, localisation levels and battery life cycle. Companies seeking the benefits will have to achieve domestic addition of 25% and make an investment of Rs 2.25 billion/GWh within the first two years, and then increase domestic value to 60% in the next five years. 

The manufacturers will cater to the needs of the consumer electronics, EV and electricity grids sectors. The Society of Manufacturers of Electric Vehicles (SMEV) mentioned that this incentive scheme will bring down the production cost of EVs since batteries are the most expensive part of an electric vehicle. As a result, the industry will attract huge investments in the next couple of years. 

According to Sohinder Gill, Director General, SMEV, the PLI scheme for promoting battery storage will also strengthen the government’s ‘Make in India’ initiative. 

Some of the outcomes expected from the PLI initiative are:
  • Direct investment of about Rs 450 billion in ACC battery storage manufacturing projects
  • Higher demand for battery storage in India
  • Increased demand for EVs
  • Import substitution of about Rs 200 billion every year
  • Promotion of niche cell technologies

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