Government to Solicit Bids for $960 Million Electric Vehicle Battery Production Initiative

India is set to launch an 80 billion rupees ($960 million) incentive program to boost the production of electric vehicle (EV) batteries, sources familiar with the matter revealed. The program, slated to kick off next month, will require successful bidders to establish advanced chemistry battery plants with a collective output of 20 gigawatt-hours.

During a consultation meeting with government officials, several companies, including Korea’s LG Energy Solution Ltd. and prominent Indian firms such as Mahindra & Mahindra Ltd., Amara Raja Energy & Mobility Ltd., Exide Industries Ltd., and Larsen & Toubro Ltd., expressed their interest in participating. The government plans to provide incentives to companies over a five-year period based on the sale of locally manufactured batteries.

While representatives for the aforementioned companies and the Ministry of Heavy Industries did not respond to requests for comments, it is reported that Reliance Industries Ltd., Ola Electric Mobility Pvt., and Rajesh Exports Ltd. were previously selected to produce 30 gigawatt-hours of battery capacity and receive incentives in the initial phase of the government program.

The move aligns with the increasing demand for batteries, projected to reach 260 gigawatt-hours by 2030. This surge in demand is driven by the growing market for electric vehicles, grid-scale energy storage, and consumer electronics, according to a report published by research center RMI India and the government’s think tank Niti Aayog.

As part of its commitment to environmentally friendly transportation, the Indian government, led by Prime Minister Narendra Modi, is contemplating reducing import taxes for battery-powered models to attract companies like Tesla Inc., as reported by the Financial Times. Additionally, the government launched a $3.1 billion incentive program in 2021 to bolster local electric vehicle production.

Despite reaching out for comments, a representative of the Ministry of Heavy Industries did not respond to inquiries. The upcoming EV battery incentive program marks another significant step toward India's goal of promoting sustainable and eco-friendly mobility solutions.

BS