Niche batteries for electric future may get ₹3k cr sops
Unlike other PLI schemes, where the focus is exclusively on domestic manufacturing, this scheme is also likely to provide subsidy for research and development of “newer chemistries” for batteries.
New Delhi: The ministry of heavy industries has moved a proposal for a ₹3,000 crore-production linked incentive (PLI) scheme to develop and make ‘niche batteries’ for electric vehicles, a key step in India’s efforts to cut fossil fuel dependence and achieve climate goals.
The proposal, which has been sent to the department of expenditure in the finance ministry, follows several months of talks between the ministry of heavy industries and NITI Aayog on how to incentivize the development of niche batteries.
“The ministry has sent the proposal for allocation of funds for the proposed scheme to the department of expenditure," said a person aware of the developments.
Unlike other PLI schemes, where the focus is exclusively on domestic manufacturing, this scheme is also likely to provide subsidy for research and development of “newer chemistries" for batteries.
Mint first reported about the plans in August last year.
Queries sent to spokespeople of the ministries of heavy industries and finance remained unanswered at press time.
The scheme is expected to provide more incentives to manufacturing firms than what is given under an existing incentive scheme for advanced chemistry cell battery storage.
The existing scheme gives a cash subsidy that has been capped at 20% of the effective price net of GST or the effective sales turnover.
In March, the heavy industries ministry selected Reliance New Energy Solar Ltd and Ola Electric Mobility Pvt Ltd among others for the ₹18,100 crore PLI scheme.
The exact percentage of subsidy under the proposed scheme could not be ascertained.
The plan to boost new battery chemistries in the country comes at a time when the government is looking at attaining self-sufficiency in battery supplies, given its energy transition targets and post-pandemic supply constraints.
So far, lithium has been the mainstay of electric vehicle batteries.
But around half the world’s lithium reserves are concentrated in just three countries—Argentina, Bolivia and Chile—while China controls 75% of lithium refining.
Lithium iron phosphate, nickel manganese cobalt, and lithium titanium oxide batteries, which come under the broad category of lithium-ion batteries, are among the most commercially viable batteries.
The search for new technologies and battery chemistries comes against the backdrop of an acute shortage of lithium in India, which has also prompted the government to try and source lithium and cobalt directly from Australia and Argentina.
These efforts have been bolstered by the recent discovery of reserves of 5.9 million tonnes of lithium ore in Reasi district of Jammu and Kashmir, vaulting India into the ranks of the world’s top-five countries for lithium reserves.
Efforts are underway globally to produce newer chemistries for batteries. According to experts, sodium sulphide, vanadium and flow batteries are options on which research is underway globally.
Sector experts suggest that a boost to local development of newer chemistries would put India at the forefront of catering to the global supply chain.
With the focus on achieving 500GW of renewable energy by 2030 and carbon neutrality by 2070, the push on battery manufacturing and battery storage has gained momentum in the country.
Indian plans to increase electric vehicle penetration by 30% by 2030 relies heavily on lithium.
Currently only around 1% of all vehicles sold in the country are electric.
