Syllabus: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
Background and Current Status
- The ₹18,100 crore ACC PLI scheme aims to build domestic EV battery manufacturing capacity.
- The target was 50 GWh cell production by 2025, but progress remains significantly delayed.
- Only 1.4 GWh capacity is installed, with 8.6 GWh under development and 20 GWh stalled.
- The scheme has created 1,118 jobs, representing only 0.12% of projected employment.
- Investment mobilisation reached only 25.58% of the targeted capital inflow.
Nature of Advanced Chemistry Cells
- ACCs store electrical energy as chemical energy and reconvert it when required.
- Lithium-ion batteries dominate current applications, including mobile devices and electric vehicles.
- The scheme is technology-agnostic, covering lithium-ion phosphate, sodium-ion, and NMC batteries.
Policy Intent and Performance
- The scheme was launched in October 2021 to reduce dependence on Chinese imports.
- As of October 2025, only 2.8% of the 50 GWh target has been commissioned.
- Despite a planned ₹2,900 crore incentive disbursement, no payouts have occurred.
- Ola Electric alone contributed the installed 1.4 GWh capacity.
Operational Design and Eligibility
- Firms bid for a minimum 5 GWh capacity commitment in a competitive auction process.
- Companies required ₹225 crore net worth per GWh of proposed manufacturing capacity.
- Subsidies allowed claims of up to ₹2,000 per KWh per battery sold.
- Domestic Value Addition targets were 25% within two years and 60% by year five.
Selected Beneficiaries
- Ola Electric received 20 GWh capacity allocation in the first auction round.
- Reliance New Energy secured 25 GWh across two auction rounds.
- Rajesh Exports was awarded a 5 GWh manufacturing allocation.
Constraints and Challenges
- The two-year gestation period was unrealistic for constructing complex gigafactories.
- India lacks facilities for processing lithium, nickel, and cobalt minerals.
- Evaluation criteria prioritised DVA compliance over manufacturing experience.
- Delays in visas for Chinese technical specialists slowed knowledge transfer and operations.
Recommended Corrective Measures
- The report suggests fast-tracking expert visas and extending project timelines.
- Long-term success requires critical mineral refining, component manufacturing, and workforce development.