Government of India to split 20 GWh of ACC PLI bids into 5 GWh each

The government of India has finalised plans to award rebidding of the unutilised 20 GWh of the Advanced Chemistry Cell scheme, into packets of 5GWh each, to multiple players, Autocar Professional has learned. This move is slated to strengthen the ecosystem for electric mobility and battery storage in the country.

Introduced in 2021, the ACC PLI Scheme has a budgetary outlay of Rs 18,100 crore.

The government had earlier awarded a total bandwidth of 50 GWh to four players including Ola Electric, Rajesh Exports, Reliance New Energy and Hyundai Global Motors, which the South Korean participant was unable to carry out.

In July 2023, the government launched a new consultative mechanism to re-open bids for the unutilised 20 GWh, with nearly 40 companies participating in the process.

"After reviewing the bids received during the stakeholder consultation process, the ministry decided to split the rebidding round into packets of 5 GWh each to ensure that at least four players received the bandwidth."

"The plan is to fully utilise available capacity to boost domestic manufacturing capacity for advanced chemistry cells and expand the number of players eligible for incentives under the ACC PLI scheme," a senior government official told Autocar Professional.

According to government sources who confirmed the above development, the current round will be open only to companies that did not make it to the first round. This means that existing players such as Ola Electric, Rajesh Exports, and Reliance New Energy will be ineligible for the new bids.

According to industry analysts, corporations such as Mahindra & Mahindra, which previously bid for 15 GWh of capacity but was not awarded any bandwidth, and other players such as Exide Batteries, Larsen & Toubro, Amara Raja Batteries, and India Power Corporation, who were left out of the last round of bidding, are expected to be in the running.

However, government officials have refused to reveal the names of the companies that bid in the current round, claiming that top decision-makers will make the final announcement soon.

According to an earlier notification, the consultative mechanism sought valuable insights and feedback from key stakeholders and prospective bidders to aid the government's programme for 50 GWh of Advanced Chemistry cell and battery production.

The current round is expected to attract Rs 7,000–8,000 crore in investment, according to industry analysts who follow the energy sector.

The government will announce the final list of awardees by the end of the month.

India does not manufacture any cells for the most commonly used lithium-ion batteries, which are currently imported. Due to lower production costs of electric vehicles and other clean energy technologies that rely on lithium-ion cells, the ACC program aims to save more than Rs 2.5 trillion in oil import bills. Clean energy investments will accelerate the transition from gasoline-powered vehicles to electric vehicles, which will be aided by renewables and other zero-emission technologies.

The PLI-ACC scheme is the flagship initiative of the Government of India to encourage domestic manufacturing of advanced chemistry cells and batteries to increase domestic value addition while also lowering battery manufacturing costs in India for India to become globally competitive.

While the current scheme requires players to make direct investments totaling more than Rs 45,000 crore over seven years, the subsidy is valid for five years and begins two years after qualifying businesses establish manufacturing units.