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Business News/ News / India/  Tenders for advanced chemistry cells PLI scheme likely by December
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Tenders for advanced chemistry cells PLI scheme likely by December

The Indian government plans to invite tenders for advanced chemistry cells (ACC) production-linked incentive scheme with a 20-GWh capacity by December.

The move offers an opportunity for applicants who did not qualify in the initial round, or couldn’t apply to avail the incentives for creating battery storage capacity in India. (REUTERS)Premium
The move offers an opportunity for applicants who did not qualify in the initial round, or couldn’t apply to avail the incentives for creating battery storage capacity in India. (REUTERS)

New Delhi: The Centre is gearing up to invite tenders for advanced chemistry cells (ACC) production-linked incentive scheme with a 20-GWh capacity by December, an official in the know said.

The move offers an opportunity for applicants who did not qualify in the initial round, or couldn’t apply to avail the incentives for creating battery storage capacity in India.

The heavy industries ministry is likely to conclude consultations with the ministry of new and renewable energy by December. The application process for new bids will begin thereafter.

In the first round of awards, three firms had secured incentives. Ola Electric qualified for the 20GWh lithium-ion cell manufacturing, Reliance New Energy for 5GWh sodium-ion cell manufacturing and Rajesh Exports for 5GWh lithium-ion cells. The companies committed a cumulative investment of 27,000 crore for the scheme.

However, 20 GWh capacity, initially awarded to a Hyundai company, was subsequently deemed not bona fide, triggering a new round of bidding.

In this upcoming round, the Centre is not likely to relax the criteria around localization of cell manufacturing (or domestic value addition), starting at 25% in the first year of manufacturing, and going up to 60% in the fifth year of production. The minimum capacity for bidding is also likely to remain at 5GWh. The Centre expects greater participation than last time with over 15 applicants, a government official said seeking anonymity.

The central government is also looking to sanction additional incentives for a new PLI scheme for niche chemistries such as solid state, zinc-based, and iron-air batteries. A capacity of G5Wh will be approved for incentives next year.

However, Suzuki Motor Co. and Tata Motors that committed 7,300 crore and 13,000 crore, respectively in cell manufacturing units in Gujarat, are likely to participate in the second phase of bidding if there was change in localization criteria or penalty provision. The ACC PLI scheme may see participation of global lithium-ion battery firms Panasonic, Samsung and LG Chem, which had not participated in round one.

Some of these players have shown interest in applying for the scheme once bids are invited, people in the know said, seeking anonymity. Besides, domestic battery firms such as Amara Raja and Exide that were wait-listed earlier, are likely to submit fresh bids.

India has high dependence on foreign markets for lithium-ion cell importing for its electric vehicles, considering that there are no existing facilities in the country. It imports cells primarily from China, as well as South Korea, Germany and Japan. According to the ministry, 10 bids were received from firms with manufacturing capacity of 128 GWh under the ACC PLI scheme earlier.

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ABOUT THE AUTHOR
Alisha Sachdev
Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
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Published: 23 Nov 2023, 10:57 PM IST
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