The government has approved the Production Linked Incentive (PLI) scheme for manufacturing advanced chemistry cell (ACC) battery at an estimated outlay of Rs 18,100 crore. The objective not only promotes the Make in India initiative but also is an attempt to bring down the price of the battery pack which is used in cars, thereby helping carmakers make electric vehicles more localised and therefore affordable. Of course, other industries will benefit from this like consumer electronics, advanced electric grids among others. According to Broadcasting Minister Prakash Javadekar, the National Programme on Advanced Chemistry Cell (ACC) Battery Storage is expected to attract foreign and domestic investment of Rs 45,000 crore and this proposal aims to achieve manufacturing of 50 gigawatts of battery storage.
He told reporters during a cabinet meeting that these incentives will be available to those companies having higher production and sales capability. This will also help manufacturers become more competitive in the global space and given that the batteries will be locally produced, it will help boost exports and the economy as well.
Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV), said, “We thank the government for approving the PLI scheme for promoting battery storage. It would strengthen our ‘Make in India initiative’ and also attract huge investments in the EV industry in the next 1-2 years. Battery occupies a larger portion of any Electric Vehicle’s cost. Thus the right policy move will help us steer towards green growth in the industry, while exponentially increasing our manufacturing capacity. Once we fully start battery manufacturing operations in the country, it will lead to the reduction of cost on purchase of electric vehicles owing to increased accessibility.”
The EV industry, globally, has been growing. To put things into perspective, global sales of EVs in 2020 increased by 39 per cent year on year to 3.1 million units. However, in India, EVs are still trying to find a strong footing. Cumulative EV sales numbers for FY2021 in India were 2,38,120 units, down 19.41 percent year on year. But, there is some good news, the electric passenger vehicle segment witnessed robust year-on-year growth albeit on a low year-ago base and was up 110 per cent with 5,905 units being sold.
With the PLI, the OEMs will certainly get a boost and with EVs lined up for launch this year, we expect a lot more action in this space.
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