Advanced Chemistry Cell (ACC) – Production Linked Incentive (PLI) Scheme

Source: TH

Subject: Schemes in News

Context: India’s Advanced Chemistry Cell–Production Linked Incentive (ACC-PLI) scheme has fallen behind schedule, with only 1.4 GWh battery capacity commissioned against a target of 50 GWh by 2026, as per a recent analytical report.

About Advanced Chemistry Cell (ACC) – Production Linked Incentive (PLI) Scheme:

What is the ACC-PLI scheme?

• The ACC-PLI scheme is a central sector incentive programme to promote domestic manufacturing of advanced battery cells (such as lithium-ion cells) used in electric vehicles (EVs) and grid-scale energy storage, reducing India’s dependence on imports.

Announced in: October 2021

Implementing Ministry: Ministry of Heavy Industries

Aim and objectives:

• Create 50 GWh of domestic ACC manufacturing capacity.

• Build a local battery supply chain (cells, components, materials).

• Reduce strategic dependence on imported batteries (especially from China).

Key features of ACC-PLI Scheme (Concise)

• Total outlay (₹18,100 crore): Government financial commitment to scale up domestic advanced battery manufacturing.

• Performance-linked incentive: Subsidy linked to actual battery cells sold, ensuring output-based support.

• Incentive cap (~₹2,000/kWh): Sets an upper limit on per-unit support to control fiscal cost.

• Minimum investment (₹1,100 crore): Ensures only serious, large-scale manufacturers

• Domestic value addition mandate: Compels creation of a local battery supply chain. 25% in 2 years: Early localisation push. 60% in 5 years: Deep manufacturing ecosystem over time.

• 25% in 2 years: Early localisation push.

• 60% in 5 years: Deep manufacturing ecosystem over time.

• Target technology: Focuses on Advanced Chemistry Cells (like lithium-ion) critical for EVs and energy storage, excluding conventional lead-acid batteries.

• Selected beneficiaries: Ola Electric, Reliance New Energy, Rajesh Exports chosen via competitive bidding. Hyundai Global exited, reducing effective allocated capacity.

• Ola Electric, Reliance New Energy, Rajesh Exports chosen via competitive bidding.

• Hyundai Global exited, reducing effective allocated capacity.