In a significant move to bolster electric vehicle (EV) adoption in India, the government is gearing up to introduce a new production-linked incentive (PLI) scheme for batteries. Union Minister of Power, New & Renewable Energy, R K Singh announced this initiative, emphasizing the need to drive down storage costs to reduce carbon emissions effectively. The article explores the details of this PLI scheme and its potential impact on India’s EV industry.
Government’s Commitment to EVs and Energy Independence
Union Minister RK Singh underlines the critical importance of transitioning to electric mobility, citing the primary goal of achieving energy independence. India aspires to climb from the 5th largest to the 3rd largest economy globally, which necessitates energy self-reliance. To accomplish this, the government is making strategic moves, one of which is the new PLI scheme for battery production.
The PLI Scheme for Advanced Chemistry Cell (ACC) Batteries
In May 2021, the Indian government approved the PLI scheme for manufacturing advanced chemistry cell (ACC) batteries with an estimated outlay of INR 18,100 crore. The primary objective of this scheme is to attract both foreign and domestic investment totaling INR 45,000 crore. ACCs are advanced energy storage technologies capable of storing electric energy and converting it when needed, playing a vital role in India’s renewable energy goals.
India’s Rising Demand for ACC Batteries
A recent report by the Confederation of Indian Industry (CII) forecasts a robust demand for ACC batteries in India, with a projected Compound Annual Growth Rate (CAGR) of 50% from 20 GWh in 2022 to approximately 220 GWh by 2030. This growth is attributed to the thriving local battery manufacturing industry and a resilient local supply chain.
Progress and Challenges
Under the PLI-ACC scheme, four successful bidders were allocated a total of 50 GWh ACC manufacturing capacity. However, one of the bidders was disqualified due to non-compliance with the RFP’s terms and conditions. The remaining three beneficiaries, including Ola Cell Technologies Pvt. Ltd, ACC Energy Storage Pvt Ltd, and Reliance New Energy Battery Storage Ltd, aim to achieve 50GWh production by 2030.
Future Prospects
The government anticipates the commencement of commercial production under the scheme in phases, starting in the current financial year. Union Minister RK Singh is resolute in addressing two key challenges faced by EV adoption in India: high costs and range anxiety. While the ACC scheme targets cost reduction, the solution to range anxiety lies in improving battery chemistries and enhancing EV charging infrastructure.
Shifting Away from Lithium
Union Minister Singh acknowledged India’s modest lithium reserves in Jammu but emphasized the importance of diversifying battery chemistries away from lithium. He pointed out the potential risks associated with dependence on a single country for lithium reserves and processing. Exploring alternative chemistries like sodium-ion is essential for ensuring a secure supply chain.
Government Support for the EV Industry
India’s commitment to EVs extends to government support through subsidies under the FAME scheme. While some countries are reducing or withdrawing EV subsidies, India continues to invest in EV industry support. The government encourages the industry to transition to a subsidy-free business model while advancing clean mobility.
Promoting Hydrogen Technologies
In addition to supporting EVs, the Indian government is actively promoting the adoption of hydrogen technologies as part of its clean mobility agenda.
The introduction of this new PLI scheme for batteries demonstrates India’s commitment to revolutionizing its EV industry, reducing costs, and achieving energy independence while aligning with its renewable energy and net-zero targets. This initiative is expected to have a profound impact on the nation’s transition to sustainable and efficient electric mobility.
