Government Launches Incentive Program to Boost EV Battery Production

According to people familiar with the matter, India intends to solicit bids for an 80 billion rupee ($960 million) incentive program for the production of electric vehicle batteries. The program will require winning bidders to build advanced chemistry battery plants with a total output of 20 gigatonnes per hour, according to the people, who declined to be identified because the plans are private. According to reports, the government will solicit bids from potential investors next month.

According to the people, companies such as Korea's LG Energy Solution Ltd. and local heavyweights such as Mahindra & Mahindra Ltd., Amara Raja Energy & Mobility Ltd., Exide Industries Ltd., and Larsen & Toubro Ltd. expressed interest during a consultation meeting with government officials. The government will provide incentives to businesses for the sale of locally manufactured batteries over a five-year period.

Requests for comment were not responded to by Mahindra, Amara Raja, Exide, LG, Larsen & Toubro, or the Ministry of Heavy Industries.

Last year, billionaire Mukesh Ambani's Reliance Industries Ltd., Ola Electric Mobility Pvt., and Rajesh Exports Ltd. were chosen to produce 30 gigatonnes of battery capacity and receive government incentives under the first phase of this government programme.

As per a report published by RMI India and the government's think tank Niti Aayog, demand for batteries is expected to rise to 260 gigatonnes per hour by 2030, catering to a growing market of electric vehicles, grid-scale energy storage, and consumer electronics.