As the Centre's much anticipated production-linked incentives (PLI) scheme launched to push for economic recovery takes shape, a total of 10 companies, including a Reliance Industries subsidiary, Hyundai Motors and Ola Electric, have applied for the government's Rs 18,100-crore production-linked incentives (PLI) scheme for advanced chemistry cells (ACC).
As per data the companies collectively bid for setting up 130 gigawatt-hour (GWh) of cell manufacturing capacity against 50 GWh of capacity to be awarded as part of the scheme, a government statement said.
To put the capacity planned into context, 50 GWh would be sufficient to equip around 125,000 electric scooters a year. The scheme is expected to boost localising the electric vehicles (EV) supply chain in India. Despite being a key component for EVs, all vehicles sold in India presently rely completely on imported cells, mainly from China.
The other companies that have applied for the PLI scheme include Larsen & Toubro, Lucas-TVS, Mahindra & Mahindra, Amara Raja Batteries, Exide Industries, Rajesh Exports and India Power Corporation Limited. Reliance Industries applied through its subsidiary Reliance New Energy Solar.
The deadline for sending applications for the scheme expired last week. Notably, the largest global lithium-ion cell makers like Samsung, lg, Panasonic, and leading Chinese players gave the scheme a miss. The companies are focusing on Europe and the US as these markets have higher pricing power and thus better return on investment for manufacturers.
Meanwhile, what makes investing big money in making cells tricky is that the technology is fast evolving and not stationary. Keeping that under consideration, the government has kept the scheme technology agnostic. The beneficiary firm will be free to choose the technology, raw material, and the cells can cater to any end application.
The Centre, however, expects that the ACC PLI scheme will help reduce crude-oil imports by promoting EVs and also increase the share of renewable energy at the national grid level.
In conjunction with the Rs 25,938-crore PLI scheme for the automotive sector and the Rs 10,000-crore scheme to subsidise EVs, the scheme is part of the government's push to EV adoption in India and make the country self-reliant in this field.
To further deepen localisation, the ACC PLI scheme comes with riders like minimum localisation of 25% within two years before increasing it to 60% in five years. While manufacturers are upbeat about the scheme, they find these targets lofty.