Ambitious scheme to spur next-generation battery manufacturing in India hits hurdle, Pg10

Key Highlights:

• The ACC-PLI scheme, launched in October 2021, aimed to establish domestic battery manufacturing.
• As of October 2025, only 1.4 GWh of battery cells have been commissioned on time, far short of the planned 50 GWh by 2026.
• The scheme has a financial outlay of ₹18,100 crore to incentivize investment in Advanced Chemistry Cell (ACC) manufacturing.
• Companies must ensure 25% local manufacturing within two years and 60% within five years to qualify for incentives.

Detailed Insights:

• The ACC-PLI scheme seeks to reduce India's reliance on China for ACC technology used in electric vehicles (EVs) and energy storage.
• Delays in visa approvals for Chinese technical specialists, local manufacturing mandates, and lack of critical technologies are hindering the scheme's progress.
• The scheme mandates a minimum investment of ₹1,100 crore and offers a maximum subsidy of ₹2,000 per kWh to attract large companies.
• Ola Electric, Reliance New Energy, and Rajesh Exports were selected as beneficiaries, but none had prior expertise in battery manufacturing.
• India's lack of a mature cell manufacturing ecosystem and dependence on imports from China pose significant challenges to the scheme's success.
• Zero incentives have been disbursed as of October 2025, against a targeted ₹2,900 crore, due to the selected companies not having started battery sales.

Key Concepts Involved:

• Advanced Chemistry Cell (ACC): Modern battery components using technologies like lithium-ion for electric vehicles.
• Production Linked Incentive (PLI) Scheme: Government initiative providing financial incentives to boost domestic manufacturing.
• Gigawatt-hour (GWh): A unit of energy representing one billion watt-hours, used to measure battery capacity.