The government has been inviting bids to establish giga-scale advanced chemistry cell battery manufacturing facilities with a cumulative 10 GWh capacity under the production-linked incentive plan, with a maximum budgeted cost of Rs 3,620 crore.
A production-linked incentive package worth Rs 18,100 crore was launched by the government in 2021 with the aim of establishing advanced chemical cell manufacturing facilities in India, with a manufacturing capacity of 50GWh.
Hyundai Global Motors withdrew from the first round of bidding, leaving the unallocated 20 GWh capacity in the program, of which the 10 GWh capacity is a part. Following the first phase of bidding, which ended in March 2022, the government granted 30GWh capacity to Ola Cell Technologies Pvt Ltd, ACC Energy Storage Pvt Ltd, and Reliance New Energy Battery Storage Ltd.
India’s production of battery cells is anticipated to support the production of electric vehicles and localize the supply chain. One of the biggest obstacles to the adoption of electric vehicles in the nation is their high acquisition costs, which are mostly caused by increased battery costs.
A new class of sophisticated storage technologies known as advanced chemistry cell batteries has the ability to store electrical energy as chemical or electrochemical energy and then transform it back into electric energy when needed. It is mostly applied to electric vehicles.
According to the Ministry of Heavy Industries, the 10 GWh capacity procurement paperwork are accessible as of right now. On February 12, there will be a pre-bid meeting, and on April 23, the bidding will begin. Through the Central Public Procurement site, a two-stage online bidding procedure will be conducted under the Quality and Cost Based Selection method.
According to the scheme guidelines, the beneficiary firm has to ensure achieving a domestic value addition of at least 25% and increase it to 60% within five years. The firms will also have to mandatorily invest Rs 225 crore per GWh for committed capacity within two years.
Heavy Industries Minister Mahendra Nath Pandey earlier said manufacturing of advanced chemistry cell batteries under the scheme is expected to start early this year. IPO-bound Ola Electric Mobility has said the company’s subsidiary Ola Cell Technologies is expected to start operations at its Giga factory in Tamil Nadu by March 2024 with a cumulative capacity of 1.4 GWh and expand it to 5 GWh by October.
Companies including Exide Industries, Amara Raja, and Mahindra & Mahindra had submitted their bids in the first round but were not selected. The new bidding round could provide an opportunity for companies such as Exide Industries and Amara Raja, which are setting up cell manufacturing units to claim incentives.