Centre Unveils ₹9,000 Crore Plan to Revolutionize EV Battery Production!
In a significant move to enhance India’s electric vehicle (EV) ecosystem, the central government is considering a ₹9,000 crore initiative aimed at boosting domestic manufacturing of battery components for electric vehicles and clean energy systems. This ambitious plan, led by the Union Ministry of Heavy Industries, is designed to reduce reliance on imports from China and strengthen India’s position in the global battery supply chain.
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Centre Unveils ₹9,000 Crore Plan: A Strategic Initiative for Domestic Manufacturing
Sources familiar with the discussions revealed that the proposed scheme is currently in the consultation phase, with key industry stakeholders meeting earlier this month to discuss its potential. The initiative aims to provide incentives to local manufacturers, addressing the capital-intensive nature of electrode production—critical components responsible for electricity transfer in batteries.
“These are initial talks underway now. A stakeholder consultation was held recently. The consideration is for incentives of about ₹9,000 crore,” one source stated. Inter-ministerial consultations are expected to follow, paving the way for a more structured approach to domestic battery component manufacturing.
The Importance of Battery Components
Batteries account for approximately 40% of an EV‘s total cost, with electrodes—specifically cathodes and anodes—making up 21% and 15% of battery costs, respectively. By promoting local production of these components, the government aims to significantly reduce the overall cost of electric vehicles, making them more competitive with traditional fuel-powered vehicles.
Despite the launch of the ₹18,100 crore production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) batteries in 2021, which allocated 40 GWh capacity to companies like Ola Electric, Rajesh Exports, and Reliance Industries, Indian manufacturers still heavily depend on imported components. The new scheme seeks to change this narrative, positioning India as a hub for green hydrogen and electrolyzer manufacturing.
Industry Support and Collaboration
The discussions have garnered support from major industry players, including Reliance Industries, Hindalco, Ola Electric Mobility, Epsilon Advanced Materials, and Amara Raja Energy & Mobility. Debi Prasad Dash, president of the India Energy Storage Alliance (IESA), emphasized the necessity of a PLI-like scheme for battery components, stating, “Currently, China supplies most components, including anodes and cathodes, to battery makers worldwide.”
Vikram Handa, managing director of Epsilon Advanced Materials, praised the government’s initiative, noting that “fiscal support for component manufacturing in the ACC sector will prove to be a significant step towards building a self-reliant and sustainable battery ecosystem.” He added that this initiative would attract investments, drive innovation, and reduce dependency on imports.
Aligning with Clean Energy Goals
The proposed scheme aligns with the upcoming Phased Manufacturing Programme (PMP) under the PM E-Drive EV subsidy scheme, which aims to mandate the indigenization of EV components. This initiative will set timelines for reducing imports of specific components, further advancing India’s clean energy objectives.
