India Boosts ACC Battery Manufacturing with New Incentive Scheme
The Ministry of Heavy Industries (MHI) has set in motion an ambitious plan to strengthen India’s Advanced Chemistry Cell (ACC) battery manufacturing capabilities. The Production Linked Incentive (PLI) scheme, officially titled the “National Programme on Advanced Chemistry Cell Battery Storage,” was approved in May 2021 and comes with a substantial budget of ₹18,100 crore aimed at establishing 50 GWh of domestic production capacity.
In a significant development, the MHI has signed a Programme Agreement with Reliance New Energy Battery Ltd. on February 17, 2025. This partnership paves the way for a new 10 GWh ACC manufacturing facility, marking the company’s entry into the second round of bidding for the PLI ACC scheme. The timeframe for this phase spans seven years starting July 1, 2025, with an initial two-year gestation period to set up the manufacturing operations.
Aiming for Energy Independence
The primary goal of the PLI ACC scheme is to diminish India’s reliance on imported ACCs by building robust domestic manufacturing capabilities. By attracting both major domestic and international investors, the government aims to create a competitive environment for ACC battery production within India.
Under the scheme, beneficiary firms are rewarded based on their quoted subsidy per kWh and the percentage of value addition achieved on actual sales. Companies must demonstrate a minimum value addition of 25% at the Mother Unit Level within the first two years, with this figure rising to 60% within five years from the appointed date.
Technological Agnosticism and R&D Support
The PLI ACC scheme supports a variety of technologies, ensuring that those employing advanced methods receive higher incentives. Additionally, expenses incurred by firms on Research and Development (R&D) can be counted towards investment criteria. This allows businesses to incorporate cutting-edge technologies into their projects, thereby enhancing the overall efficiency and innovation in battery manufacturing.
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