Reliance, Ola Electric, And Others Bid For Incentives Under $2.4 Billion Battery Scheme

Last Updated on May 3, 2022 by Anu Joy

The government announced on Saturday that India’s Reliance Industries, Softbank Group-backed Ola Electric, and manufacturer Mahindra & Mahindra have filed proposals for the country’s $2.4 billion battery project.

Last year, India finalised an incentive package to encourage companies to engage in local battery manufacturing as it seeks to construct a domestic supply chain for clean transportation and renewable energy storage. According to the Ministry of Heavy Industries, bids have also been filed by Hyundai Global Motors, engineering firm Larsen & Toubro, and battery manufacturers Amara Raja and Exide.

“The initiative envisions an investment that will stimulate domestic production… and foreign direct investment in the country,” according to the ministry. The Ministry has also encouraged major corporations to invest, including Tesla Inc, Samsung, LG Energy, Northvolt, and Panasonic.

Companies must install at least 5 GWh of storage capacity and meet specific local content requirements to qualify for the incentives, which would require a minimum expenditure of more than $850 million. According to the government, ten companies have filed bids totaling approximately 130 Gwh.

Clean auto technology is an important component of India’s goal of decreasing pollution in large cities and reducing reliance on oil. However, due to the high cost of imported batteries, electric vehicles (EVs) now account for only a small portion of total sales in the country.

The country wants electric cars to account for 30 percent of private automobile sales by 2030, and electric motorbikes and scooters to account for 40 percent of such sales, pushing demand for batteries, which presently account for 35 percent to 40 percent of total vehicle cost.