Cabinet approves Rs 18,000-cr PLI scheme for battery manufacturing

The Centre hopes to create direct investment of Rs 45,000 cr in ACC Battery storage projects

The Union Cabinet on Wednesday approved an Rs 18,100-crore plan to incentivise battery makers to manufacture locally as it looks to cut import dependence while giving a boost to electric vehicle (EV) adoption.
 
This was a Department of Heavy Industries’ proposal, which the government expects will create direct investment of Rs 45,000 crore.
 
Under the production-linked incentive (PLI) scheme floated by the central government, the Cabinet in November 2020 had approved Rs 18,000 crore for domestic manufacturing of Advanced Chemistry Cell (ACC) battery storage.
 
Currently, the country’s ACC demand is being met through imports.
 
The nodal ministry, thereafter, proposed a national programme on ACC battery storage to achieve manufacturing capacity of 50 GigaWatt-Hour (GWh) of ACC and 5 GWh of “Niche” ACC. This was approved by the Cabinet on Wednesday.
 
Each manufacturer would have to commit to set up an ACC production facility of a minimum 5 GWh capacity and ensure a minimum 60 per cent domestic value addition at the project level within five years, said a policy note by the Cabinet.
 
“The beneficiary firms would have to achieve a domestic value addition of at least 25 per cent and incur the mandatory investment of Rs 225 crore/GWh within two years (at the mother unit level) and raise it to 60 per cent domestic value addition within five years, either at mother unit, in the case of an integrated unit, or at the project level, in the case of a ‘hub & spoke’ structure.”
 
The Cabinet statement said it will lead to “net savings of Rs 2-2.5 trillion on account of oil import bill reduction during the period of this programme as ACCs manufactured under the programme are expected to accelerate EV adoption.”
 
The government expects demand to primarily come from consumer electronics, advanced electricity grids, and solar rooftop sectors.
 
ACCs are the new generation of advanced storage technologies that can store electric energy either as electrochemical or as chemical energy and convert it back to electric energy as and when required.