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Delays successful visa approvals for Chinese method specialists, requirements that mandate section manufacturing, and the deficiency of captious technologies endanger the government’s ambitious Advanced Chemistry Cell Production Linked Incentive (ACC-PLI) scheme, says a study by the probe firms Institute for Energy Economics and Financial Analysis (IEEFA) and JMK Research and Analytics released earlier this week.
The strategy was launched successful October 2021 to catalyse domestic, next-generation artillery manufacturing.
As of October 2025, however, lone 1.4 gigawatt-hour (GWh) worthy of artillery cells person been commissioned connected time, portion 8.6 GWh is nether improvement but delayed. The 2021 program had envisaged artillery compartment manufacturing capableness of 50 GWh by 2026.
Advanced Chemistry Cells are the components of modern batteries utilizing technologies specified arsenic lithium-ion to tally electrical vehicles and are antithetic from the classical lead-acid batteries that commencement a car oregon tally inverters.
The ACC-PLI scheme, launched by the Ministry of Heavy Industries successful October 2021, promised emergent artillery manufacturers, who won an auction, a definite magnitude of wealth for each artillery they sold, arsenic a mode to incentivise concern successful the sector.
The government’s strategy besides aimed to physique a section artillery proviso concatenation (cathode, anode, electrolyte) to trim import dependence, mobilising backstage investments and planetary tech partnerships, lowering artillery costs, and accelerating electrical conveyance (EV) and vigor retention adoption.
Currently, China is the ascendant supplier of specified cells, and 1 of the aims of the strategy is to trim India’s dependence connected the country. With an outlay of ₹18,100 crore ($2.08 billion), the ACC-PLI sought to pull ample companies by mandating a minimum concern of ₹1,100 crore ($129.3 million).
In return, companies would person a maximum subsidy of ₹2,000 per KWH. Another mandate was that companies should guarantee 25% of the manufacturing was section wrong 2 years, and 60% wrong 5 years.
While respective companies flocked to bid for 50 GWh capableness successful the archetypal circular of auctions, lone 30 GWh was efficaciously allotted.
Ola Electric, Reliance New Energy, Hyundai Global, and Rajesh Exports emerged arsenic the selected beneficiaries, though Hyundai Global yet dropped out. None of the selected companies really had expertise successful artillery manufacturing. Companies that had specified acquisition — Amara Raja and Exide Industries, though the accepted lead-acid ones — were priced retired of the auction. “The precocious net-worth request (a minimum of ₹2.25 cardinal per GWh) further restricted information to ample corporates,” the study notes.
Because nary of the 3 companies person started selling batteries, zero incentives person been disbursed to immoderate beneficiary against the targeted ₹2,900 crore by October 2025. Ola Electric has besides scaled backmost its enlargement plans and present aims to instal lone 5 GWh by fiscal twelvemonth (FY) 2029. The different beneficiaries are yet to committee their ACC artillery manufacturing facilities. Rajesh Exports lags the most, with advancement constricted to onshore acquisition, portion reports of fiscal discrepancies person further raised concerns astir its quality to committee the installation successful the adjacent term, the study notes.
“India lacks a mature compartment manufacturing ecosystem, including captious mineral refining and compartment constituent production, which leaves the manufacture astir wholly babelike connected imports from China. Industry stakeholders besides item delays successful visa approvals for Chinese method specialists required for instrumentality installation, further slowing progress.
“In addition, scheme-related issues specified arsenic an assertive two-year installation timeline and precocious home value-ad requirements airs important challenges for PLI beneficiaries with nary anterior acquisition successful artillery manufacturing,” the study underlines. “There is simply a important spread betwixt the intended and existent outcomes of the ACC-PLI scheme. Against an estimated 1.03 cardinal jobs, the strategy has generated lone 1,118 jobs (0.12%).”
The EV assemblage is the largest user of lithium batteries successful India, accounting for astir 70-80% of full artillery demand. EV income successful FY2024-25 grew year-on-year (YoY) astatine 15.3%, importantly lesser than the 49% maturation predicted from 2022 -2030.
