The government today invited bids to set up giga-scale advanced chemistry cell battery manufacturing facilities of a cumulative 10 GWh capacity under the production-linked incentive scheme with a maximum budgetary outlay of Rs 3,620 crore.
In 2021, the government announced a Rs 18,100-crore production-linked incentive scheme to set up advanced chemistry cell manufacturing facilities in India with a target of achieving 50GWh manufacturing capacity.
The 10 GWh capacity is part of the unallocated 20 GWh capacity in the scheme after Hyundai Global Motors pulled out from the first round of bidding. The government has awarded 30GWh capacity to Ola Cell Technologies Pvt Ltd, ACC Energy Storage Pvt Ltd and Reliance New Energy Battery Storage Ltd following the first round of bidding, which concluded in March 2022.
Battery cell manufacturing in India is expected to aid electric vehicle manufacturing and localise the supply chain. The high cost of acquisition, primarily due to higher battery cost, is seen as a major hurdle in electric vehicle adoption in the country.
Advanced chemistry cell batteries are a new generation of advanced storage technologies that can store electric energy either as electrochemical or as chemical energy and convert it back to electric energy as and when required. It is largely used in electric mobility.
The Ministry of Heavy Industries said tender documents for the 10 GWh capacity are available from today. Pre-bid conference will be held on February 12, while bidding will open on April 23. The bidding process will be held online through a two-stage process, under the Quality and Cost Based Selection mechanism through the Central Public Procurement portal.
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.