Four years after launch, Centre's Rs 18,100 crore battery manufacturing scheme yet to deliver any output
Four years after its launch in May 2021, the Centre's ambitious Rs 18,100 crore battery manufacturing scheme is yet to start commercial production. Launched under the Ministry of Heavy Industries, the Production Linked Incentive scheme aims to establish a domestic manufacturing capacity of 50 GWh for Advanced Chemistry Cell (ACC) batteries, critical for electric vehicles, renewable energy storage and grid applications. However, so far it has failed to produce a single unit of commercial battery output, raising questions about the government's plans for energy self-reliance. ACC is a technical term for modern, high-performance batteries like lithium-ion batteries used in electric vehicles, solar energy storage and other renewable energy applications. Currently, India imports from other countries, extensively from China. This has made India dependent on foreign suppliers. Till 2025, the companies participating in the scheme were to invest Rs 2,145 crore and directly employ 1007 people. The New Indian Express found that nothing has been done so far even after a span of four years. Unhappy with the firms, the ministry issued show cause notices and levied fines. The firms, however, have requested to waive the fines, promising that they will start the project as soon as possible. A senior officer stated that there are various challenges faced by domestic manufacturers in competing with imported batteries. These include unavailability of technology, skilled manpower gap, import of critical equipment and machinery and non-availability of upstream components. By providing subsidy for the production of advanced storage technologies, the scheme is supposed to reduce India's reliance on imported lithium-ion batteries, enhance energy security and support the nation's 500 GW renewable energy target by 2030, said the officer. He added that the main objectives of the scheme were to promote domestic manufacturing thereby reducing dependence on imports, achieve technology neutrality by innovation in cell chemistries beyond lithium-ion, including sodium-ion and solid-state batteries, attract substantial investments, promote research and development and establish at least 50 GWh of ACC manufacturing capacity domestically. The ministry laid out detailed criteria for availing subsidy. The beneficiary firms had to fulfill three fundamental requirements and clear two milestones. First, they must establish a complete ACC battery manufacturing facility as per the committed capacity mentioned. Second, they must achieve the committed value addition levels specified in the programme agreement. Finally they had clear two milestones within strict timelines. The first milestone was that within two years the beneficiaries must invest at least Rs 225 crore per GWh of committed capacity, excluding land costs, and 25 percent of the value must be created in India. The second was that in five years, beneficiaries must complete 60 percent value addition in ACC manufacturing. Thereafter the firm can receive the subsidy. The ministry initiated two rounds of bidding to award 40 GWh of the targeted 50 GWh capacity. Three firms received contracts totaling 30 GWh. Rajesh Exports, operating as JACC Energy Storage Private Limited, quoted 5 GWh and was awarded the full 5 GWh, requiring a minimum investment of Rs 1,125 crore. Ola Cell Technologies Private Limited quoted 20 GWh and received the full 20 GWh, obligating them to invest at least Rs 4,500 crore. Reliance New Energy Battery Storage Limited quoted 20 GWh but was awarded only 5 GWh, with a minimum investment requirement of Rs 1,125 crore. There was a second round of bidding where Reliance New Energy Battery Limited received 10 GWh more of capacity, requiring a minimum investment of Rs 2,250 crore. The total capacity awarded stands at 40 GWh across four firms, with a collective minimum investment requirement of Rs 8,100 crore at the mandated rate of Rs 225 crore per GWh. The progress report reveals a dismal picture for a scheme now in its fourth year. The production status stands at 1 GWh. The subsidy disbursement remains at zero, with not a single rupee of the Rs 18,100 crore budgetary allocations paid out. Ola, however, stated that its gigafactory is now ramping up and producing cells for use in its vehicles, moving beyond test cells. The company will continue scaling production through the year. Ola has invested Rs 1500 crore in its 5 GWh plant and is on track to complete the remaining investment with the plant's full budget set at Rs 2800 crore, it said.
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