Context: As reported by The Hindu, the Advanced Chemistry Cell (ACC) Production Linked Incentive (PLI) Scheme, launched in October 2021, was envisioned as a cornerstone of India’s electric mobility and energy storage strategy. However, against a target of 50 GWh battery manufacturing capacity by 2025, only 1.4 GWh has been commissioned so far, indicating significant implementation bottlenecks.
About the ACC PLI Scheme
- Objective: Develop a domestic advanced battery ecosystem to reduce near-total import dependence and support EV adoption and renewable energy integration.
- Financial Outlay: ₹18,100 crore.
- Incentive Structure: Performance-linked subsidy of up to ₹2,000 per kWh, aimed at attracting large private investments into battery gigafactories.
- Technology-Agnostic Design: Covers lithium-ion, lithium iron phosphate (LFP), sodium-ion, and other emerging chemistries.
- Domestic Value Addition (DVA):
- 25% within 2 years
- 60% by the fifth year
Advanced Chemistry Cells (ACC) are next-generation batteries that store electrical energy chemically and discharge it on demand, forming the backbone of EVs and grid-scale storage.
Current Performance Snapshot
- Installed Capacity: 1.4 GWh commissioned — only 2.8% of the 50 GWh target.
- Project Delays:
- 8.6 GWh under development with major delays.
- 20 GWh shows no visible progress.
- Employment Generation: 1,118 jobs, far below the estimated 1.03 million potential jobs.
- Investment Mobilised: Only 25.58% of the targeted capital inflows achieved.
- Incentives Disbursed: ₹0, as milestone conditions remain unmet.
Reasons for Underperformance
- Unrealistic Timelines: A two-year gestation period is misaligned with global gigafactory setup cycles of 4–6 years, delaying over 90% of capacity.
- Raw Material Bottlenecks: India processes <1% of global lithium and lacks cobalt/nickel refining capacity, constraining DVA compliance.
- Experience Gap: Established players like Exide and Amara Raja were excluded; all awarded capacity went to new entrants.
- Skill Deficit: Battery manufacturing skills remain underdeveloped across most projects.
- Visa & Expertise Delays: Shortage of foreign technical specialists slowed plant commissioning.
Implications for India
- EV Affordability: Batteries account for 35–45% of EV cost; delayed localisation keeps prices high.
- Import Dependence: Nearly 100% reliance on imported advanced battery cells continues.
- Clean Energy Transition: Storage delays affect renewable integration, jeopardising the 500 GW non-fossil target by 2030.
- Strategic Vulnerability: With China controlling over 75% of global battery capacity, India faces supply-chain and geopolitical risks.
Way Forward
- Timeline Realism: Align commissioning schedules with global norms; adopt phased rollouts (as in the India Semiconductor Mission).
- Mineral Security: Expand refining under the Critical Minerals Mission and overseas acquisitions (e.g., KABIL in Argentina).
- Experience Weightage: Modify PLI criteria to reward proven manufacturers.
- Technology Transfer: Fast-track expert visas, JVs, and licensing with global leaders.
- Demand Linkage: Integrate ACC PLI with EV subsidies (PM E-Drive) and renewable storage tenders for assured offtake.