Ola Electric, Rajesh Exports and Reliance New Energy to make batteries for EVs in India

Ola Electric

With a view to boost local manufacturing of battery cells for electric vehicles (EVs) in India, three companies viz., Ola Electric, Rajesh Exports and Reliance New Energy have signed an agreement to the tune of Rs 18,100 crore under the union government’s production linked incentive (PLI) scheme.

Ola Electric has set a target to soon launch its first electric car. The company, which already manufactures electric scooters, is reportedly seeking partners for setting up a new facility to make EV batteries and also work on the company’s electric car.

Reportedly, under the PLI scheme, a total of 10 bids were received from companies with a manufacturing capacity of 128 Gigawatt-hours (GWh), and then these three companies were finalised.

Furthermore, it is anticipated that the three chosen companies will develop a battery manufacturing capacity of around 95 GWh. In addition, the companies are required to establish a manufacturing facility within two years.

Additionally, companies will receive incentives for the following five years on the sale of manufactured EV batteries.

The government has approved the PLI scheme under the ‘National Program on Advanced Chemistry Cell (ACC) Battery Storage’ in order to achieve a manufacturing capacity of 50 GWh of ACC.

According to reports, the beneficiary company under this program shall be free to select the most appropriate modern technology, along with the relevant plant and machinery, raw materials, and other intermediate goods, in order to set up a cell production facility that can accommodate any application.

Via the PLI scheme, the government envisions an investment that will increase domestic value addition while also ensuring that the levelized cost of battery manufacturing in India is competitive on a global scale.

Additionally, this will facilitate battery storage demand creation for electric vehicles and stationary storage, along with the development of a complete domestic supply chain and foreign direct investment in the country. With a focus on developing domestically produced EV battery cells, this initiative is in line with the government’s aim of promoting the EV industry’s growth in the country.

Commenting on the PLI scheme, Union Minister for Heavy Industries, Mahendra Nath Pandey said, “This will be favourable to the EV ecosystem and energy storage market as it will support the demand for EVs and renewable and attract investment in this sector. Today, big companies are investing in battery manufacturing in India. We should support them and make India a truly global manufacturing hub. This will also help us to achieve India’s commitment to Panchamrit given by PM Modi in COP 26.”

Echoing similar sentiments, Secretary, Ministry of Heavy Industries, Arun Goel said, “Now, it’s the time for private players to take the lead and become global champions and also make the country the global hub in the energy storage segment.”

Also Read | Ola Electric set to mass-produce lithium-ion cells by 2023

Sharing his views, CEO and Founder of Ola, Bhavish Aggarwal said, “Today, 90 per cent of global capacity for cell manufacturing is in China, and to reverse this import dependency, locally manufactured cell technology is key. The ACC PLI scheme will be instrumental in making India self-reliant and localising the most critical aspects of the EV value chain. At Ola, our roadmap to develop cell technology and manufacturing is vigorously progressing; making us a stronger vertically integrated mobility company across – products, mobility services, and tech.”

This PLI scheme for ACC, along with the already launched PLI scheme for the automotive sector (Rs 25,938 crore) and Faster Adoption of Manufacturing of Electric Vehicles (FAME) (Rs 10,000 crore) will enable India to leapfrog from traditional fossil fuel-based automobile transportation system to environmentally cleaner, sustainable, advanced and more efficient EV based system.