Advanced Chemistry Cell production linked incentive – Artifex.News

What’s ailing India’s battery scheme for EVs? | Explained

admin — Sat, 31 Jan 2026 18:50:00 +0000

The ACC PLI scheme, launched in October 2021, was designed to catalyse a domestic battery manufacturing ecosystem and reduce a near-total reliance on Chinese imports. File image for representation only.
| Photo Credit: PTI

The story so far: An ambitious ₹18,100 crore scheme to facilitate the manufacture of advanced chemistry cell batteries in India, particularly for Electric Vehicles (EVs), is floundering. The Advanced Chemistry Cell Production Linked Incentive (ACC PLI) had a target of making battery cells worth 50 gigawatt-hour (GWh) by 2025, but only 1.4 GWh has been installed; approximately 8.6 GWh is ‘under development’ but delayed, while 20 GWh has seen no progress at all. Additionally, the scheme has generated only 1,118 jobs — just 0.12% of the estimated 1.03 million — and attracted only 25.58% of its targeted investment.

Also Read | Ambitious scheme to spur next-gen battery manufacturing in India stumbles

What are Advanced Chemistry Cells (ACC)?

They represent a new generation of advanced storage technologies that can store electric energy as chemical energy and convert it back to electric energy as and when required. Lithium-ions — the mainstay of cellphone batteries — are the most prominent today among this class of batteries. However, the scheme is “technology agnostic” and is open to other combinations such as nickel manganese cobalt, lithium-ion phosphate and sodium-ion batteries.

EDITORIAL | Falling short: On India’s EV journey

What is the intent of this scheme?

The ACC PLI scheme, launched in October 2021, was designed to catalyse a domestic battery manufacturing ecosystem and reduce a near-total reliance on Chinese imports. However, an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research and Analysis reveals that the policy’s ambitious goals have yet to translate into significant realised capacity. As of October 2025, only 2.8% of the targeted 50 GWh capacity has been commissioned. The 1.4 GWh is from a single beneficiary, Ola Electric. Moreover, despite a targeted incentive disbursement of ₹2,900 crore by this period, zero funds have been paid out because no beneficiary has met the necessary milestones.

Also Read | Government rolls out 100% subsidy for EV charging infrastructure under PM E-Drive

How was the scheme supposed to work?

The primary aim of the scheme was to encourage industry into building domestic capacity for essential components like cathodes, anodes, and electrolytes. This was to be done by attracting major private players and global technology partnerships to the sector and in the process lower battery costs to accelerate the adoption of EVs and Energy Storage Systems (ESS). The latter are large blocks of battery cells that can be used to supply solar or wind power, during the night or windless days respectively. Companies were to participate in an auction to commit to a minimum bid size of 5 GWh and have a net worth of at least ₹225 crore per GWh of committed capacity and produce batteries. For every battery sold, they could claim up to ₹2,000 per KWh as subsidy. There were other caveats though: companies had to achieve 25% Domestic Value Addition (DVA) within two years and reach 60% DVA by the fifth year.

Also Read | What is India’s latest approach to localising EV manufacturing?

Which companies were selected?

In the first auction round of the ACC PLI scheme, three companies were selected as beneficiaries: Ola Electric, Reliance New Energy, and Rajesh Exports. Ola Electric was awarded a capacity of 20 GWh; Reliance New Energy initially secured 15 GWh in the first round and subsequently won an additional 10 GWh in the second auction round; and Rajesh Exports was awarded a capacity of 5 GWh.

Also Read | Centre notifies guidelines to boost electric car production

Why has the scheme been unsuccessful?

The scheme mandates that beneficiaries commission their facilities within a two-year “gestation period,” a target deemed unrealistic for building complex gigafactories from scratch in a nascent market. Additionally, the DVA requirements have been difficult because India lacks sufficient facilities for processing minerals, lithium, nickel and cobalt. Secondly, the scheme’s evaluation criteria prioritised DVA and subsidy benchmarks over prior manufacturing experience. Thus, established battery players like Exide and Amara Raja did not qualify, leaving the project in the hands of novices who are still building foundational technical competencies. Finally, India’s dependency on China for raw material, technical competency and knowhow has led to sluggish progress. A major bottleneck is the delay in visa approvals for Chinese technical specialists, as India lacks skilled workforce for cell manufacturing.

Also Read | China files complaint against India in World Trade Organisation over EV, battery subsidies

What fix does the report recommend?

Immediate recommendations include fast-tracking visas for technical experts and extending implementation timelines by at least one year to waive current penalties. Long-term success will require schemes for critical mineral refining and component manufacturing, alongside focused R&D and talent development.

Published – February 01, 2026 02:10 am IST

Source link

Ambitious scheme to spur next-gen battery manufacturing in India stumbles

admin — Fri, 23 Jan 2026 16:34:00 +0000

Delays in visa approvals for Chinese technical specialists, requirements that mandate local manufacturing, and the lack of critical technologies threaten the government’s ambitious Advanced Chemistry Cell Production Linked Incentive (ACC-PLI) scheme, says a report by the research firms Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research and Analytics released earlier this week.

The scheme was launched in October 2021 to catalyse domestic, next-generation battery manufacturing.

As of October 2025, however, only 1.4 gigawatt-hour (GWh) worth of battery cells have been commissioned on time, while 8.6 GWh is under development but delayed. The 2021 plan had envisaged battery cell manufacturing capacity of 50 GWh by 2026.

Advanced Chemistry Cells are the components of modern batteries using technologies such as lithium-ion to run electric vehicles and are different from the classical lead-acid batteries that start a car or run inverters.

The ACC-PLI scheme, launched by the Ministry of Heavy Industries in October 2021, promised emergent battery manufacturers, who won an auction, a certain amount of money for every battery they sold, as a way to incentivise investment in the sector.

The government’s scheme also aimed to build a local battery supply chain (cathode, anode, electrolyte) to reduce import dependence, mobilising private investments and global tech partnerships, lowering battery costs, and accelerating electric vehicle (EV) and energy storage adoption.

Currently, China is the dominant supplier of such cells, and one of the aims of the scheme is to reduce India’s dependence on the country. With an outlay of ₹18,100 crore ($2.08 billion), the ACC-PLI sought to attract large companies by mandating a minimum investment of ₹1,100 crore ($129.3 million).

In return, companies would receive a maximum subsidy of ₹2,000 per KWH. Another mandate was that companies should ensure 25% of the manufacturing was local within two years, and 60% within five years.

While several companies flocked to bid for 50 GWh capacity in the initial round of auctions, only 30 GWh was effectively allotted.

Ola Electric, Reliance New Energy, Hyundai Global, and Rajesh Exports emerged as the selected beneficiaries, though Hyundai Global eventually dropped out. None of the selected companies actually had expertise in battery manufacturing. Companies that had such experience — Amara Raja and Exide Industries, though the traditional lead-acid ones — were priced out of the auction. “The high net-worth requirement (a minimum of ₹2.25 billion per GWh) further restricted participation to large corporates,” the report notes.

Because none of the three companies have started selling batteries, zero incentives have been disbursed to any beneficiary against the targeted ₹2,900 crore by October 2025. Ola Electric has also scaled back its expansion plans and now aims to install only 5 GWh by financial year (FY) 2029. The other beneficiaries are yet to commission their ACC battery manufacturing facilities. Rajesh Exports lags the most, with progress limited to land acquisition, while reports of financial discrepancies have further raised concerns about its ability to commission the facility in the near term, the report notes.

“India lacks a mature cell manufacturing ecosystem, including critical mineral refining and cell component production, which leaves the industry almost entirely dependent on imports from China. Industry stakeholders also highlight delays in visa approvals for Chinese technical specialists required for equipment installation, further slowing progress.

“In addition, scheme-related issues such as an aggressive two-year installation timeline and high domestic value-ad requirements pose significant challenges for PLI beneficiaries with no prior experience in battery manufacturing,” the report underlines. “There is a substantial gap between the intended and actual outcomes of the ACC-PLI scheme. Against an estimated 1.03 million jobs, the scheme has generated only 1,118 jobs (0.12%).”

The EV sector is the largest consumer of lithium batteries in India, accounting for roughly 70-80% of total battery demand. EV sales in FY2024-25 grew year-on-year (YoY) at 15.3%, significantly lesser than the 49% growth predicted from 2022 -2030.

Published – January 23, 2026 10:04 pm IST

Source link