Cabinet approves ₹18,100 cr PLI sops for battery makers

NEW DELHI: The Union cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a ₹18,100 crore production-linked incentive (PLI) scheme for setting up Tesla-style giga factories to manufacture batteries. This comes even as India prepares to switch to electric vehicles to curb pollution and cut its dependence on oil imports.

The plan is to set up a 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 a ₹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 5 GWH capacity and ensure a minimum 60% domestic value addition at the project level within five years,” the government said.

The incentive will be paid out on the basis of sales, energy efficiency, battery life cycle, and level of localisation.

“The beneficiary firms have to achieve a domestic value addition of at least 25% and make the mandatory investment ₹225 crore /GWH within two years (at the mother unit level) and raise it to 60% domestic value addition within five years,” the government said.

Such battery storages will cater not only to electric vehicles, but also to the consumer electronics industry and electricity grids.

“All the demand of the ACCS is being met through imports in India. The National Programme on ACC Battery Storage will reduce import dependence. It will also support the Atmanirbhar Bharat initiative. ACC battery storage manufacturers will be selected through a transparent competitive bidding process. The manufacturing facility would have to be commissioned within two years. The incentive will be disbursed thereafter over five years,” the government said.