No battery incentives have been handed out yet. Govt to review scheme
Under the scheme, MHI had planned to award incentives for developing 50 gigawatt-hour (GWh) of storage capacity to interested battery makers to ensure that indigenous batteries would be made by the end of 2029.
But the government has only managed to secure manufacturers for 40 GWh, with the remaining capacity yet to be awarded. There has been no disbursal of funds yet.
'There has been very little traction in the ACC PLI. Capacities that have developed are also very little. With that in mind, there is going to be a review of the scheme," said one of the officials cited above, requesting anonymity.
The review may focus on why the scheme has not taken off and discuss whether any amendments to the scheme are necessary, said the official.
Queries emailed to the heavy industries ministry sent on 14 August remained unanswered.
Union heavy industries minister HD Kumaraswamy had told Mint in June that 1.4 GWh capacity has been installed by Ola Cell Technologies Pvt Ltd, and that more than 10 non-PLI beneficiary firms had started work to install about 100 GWh of battery capacity.
Developing indigenous batteries is crucial as India's rising electric vehicle adoption deepens the country's dependence on Chinese batteries. China's footprint in theglobal EV industry is difficult to ignore. It is the world's largest manufacturer of EV batteries – a component that accounts for about 40-50% of the vehicle's cost.
India still has not started making high-performance lithium-ion cells that EV batteries are made of. However, most automakers assemble imported cells to form battery packs.
Under the battery PLI scheme, three companies have been awarded a total capacity of 40 GWh, with Bengaluru-based Ola Electric leading with 20 GWh, Reliance Industries Ltd with 15 GWh, and Rajesh Exports with 5 GWh.
Ola Electric chairman and managing director Bhavish Aggarwal said in an earnings call in July that the company was in talks with the government to 'relook" the timelines in the battery PLI scheme.
Earlier, the government had fined all three companies under the scheme for delays in meeting December 2024 milestones of investments in manufacturing cells.
The penalties, which would be cut from the incentives to be given to these companies, are likely to amount to approximately ₹100 crore, said Aggarwal in the same earnings call on 14 July.
Under the central government's EV adoption schemes such as the ₹10,900-crore PM E-drive scheme and the PLI scheme for automobiles and auto components (PLI-Auto), manufacturers have to pass stringent localisation criteria to receive incentives for manufacturing. Localisation refers to the share of components and raw material that sourced from within India.
But these requirements only call for battery packs to be assembled in India. For instance, the phased manufacturing programme (PMP) for electric vehicles under the PM E-drive scheme, which enlists the components that manufacturers are allowed to import, creates an ecosystem where automakers are not required to make the cell in India.
'That is because the Indian industry is not equipped to do so currently," said the official cited above. 'The PMP is something that can be amended as per the development in the industry."
The PLI-Auto scheme, a ₹25,938-crore package for zero-emission vehicles and their spare parts, also has a strict mandate of 50% localisation.
In June and July, the heavy industries ministry also reviewed this scheme. Only 17 of the 82 shortlisted companies had secured the necessary approvals for their products, said the officials aware of the development.
'After the review, MHI has also sought responses from the companies that were shortlisted under the PLI-Auto scheme, but have not secured approvals for their products yet," said the second official, also requesting anonymity.
India's battery manufacturing efforts also found a place in Prime minister Narendra Modi's Independence Day speech, where he implored the private industry to develop indigenous batteries for electric vehicles.
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