The Indian government’s Production-Linked Incentive (PLI) scheme for advanced cell chemistry (ACC) battery storage aims to reduce the country’s dependence on imports and boost domestic manufacturing. However, three years after its launch, the scheme has seen little progress, with many companies struggling to meet the mandated criteria and bureaucratic hurdles. Reliance Industries’ electric vehicle battery-making unit has asked for an extension to set up its manufacturing plant, while another company, Rajes Exports, has been penalized for not adhering to the scheme’s mandates.
The government had launched the PLI scheme in 2021 with a budgetary outlay of Rs 18,100 crore for 50GWh of ACC and 5GWh of niche ACC battery manufacturing capacity. However, despite receiving incentives, companies like Ola Electric, Hyundai Global Motors, and Reliance New Energy Solar have not started production yet. The selection process has been criticized for being unclear, and the criteria for evaluation has been deemed too strict.
Industry experts point out that the PLI scheme is riddled with challenges, including market volatility, difficulties in meeting the mandated criteria, and bureaucratic delays. To make the scheme more effective, experts suggest revising the processes and criteria, increasing budgetary support for R&D in advanced battery chemistries, and providing incentives for battery recycling and raw material supply chains.
In the meantime, companies like Tata, Amara Raja, and Exide are investing in Li-ion cell manufacturing for mobility and storage, and startups are working on R&D in battery technology. Some experts believe that the government should consider exempting import duties on cell production and using that money to incentivize local manufacturers, which could accelerate indigenous production. Others suggest creating separate PLIs for battery raw materials and pushing innovation in low-cost materials and recycling technologies. Ultimately, the government needs to revisit the PLI scheme to make it more effective in boosting India’s battery manufacturing industry.