{"id":85258,"date":"2026-02-01T10:27:20","date_gmt":"2026-02-01T04:57:20","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=85258"},"modified":"2026-02-02T11:41:39","modified_gmt":"2026-02-02T06:11:39","slug":"why-indias-ev-battery-scheme-is-falling-short","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/why-indias-ev-battery-scheme-is-falling-short\/","title":{"rendered":"Why India\u2019s EV Battery Scheme Is Falling Short"},"content":{"rendered":"<h2><b>EV Battery Scheme Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India\u2019s \u20b918,100 crore <\/span><b>Advanced Chemistry Cell<\/b><span style=\"font-weight: 400;\"> (ACC) Production Linked Incentive scheme, aimed at building domestic battery manufacturing for electric vehicles, has made limited progress.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Against a target of 50 GWh capacity by 2025, only 1.4 GWh has been installed, with 8.6 GWh delayed and 20 GWh seeing no movement.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scheme has also delivered just 1,118 jobs\u2014a fraction of the projected employment\u2014and attracted only about a quarter of the intended investment, raising concerns over its effectiveness.<\/span><\/li>\n<\/ul>\n<h2><b>About Advanced Chemistry Cells (ACC)<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Advanced Chemistry Cells are <\/span><b>next-generation<\/b><span style=\"font-weight: 400;\"> energy storage technologies <\/span><span style=\"font-weight: 400;\">that store electricity in chemical form and release it when needed<\/span><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Lithium-ion batteries are the most widely used ACCs today, but India\u2019s ACC scheme is <\/span><b>technology-agnostic<\/b><span style=\"font-weight: 400;\">, allowing alternatives such as nickel manganese cobalt, lithium iron phosphate, and sodium-ion batteries.<\/span><\/li>\n<\/ul>\n<h2><b>ACC PLI Scheme: Big Ambitions, Limited Outcomes So Far<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Launched in October 2021, the Advanced Chemistry Cell (ACC) PLI scheme aimed to build a <\/span><b>domestic battery manufacturing ecosystem<\/b><span style=\"font-weight: 400;\"> and cut India\u2019s heavy dependence on Chinese imports.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, various studies by experts show that progress has been minimal.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">As of October 2025, only 2.8% of the targeted 50 GWh capacity has been commissioned\u20141.4 GWh, all from Ola Electric.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite a planned incentive payout of \u20b92,900 crore by this stage, <\/span><span style=\"font-weight: 400;\">no funds have been disbursed, as none of the beneficiaries have met the required milestones<\/span><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2><b>How the ACC PLI Scheme Was Designed to Work<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The ACC PLI scheme aimed to build domestic battery manufacturing capacity by incentivising private players to set up production of key components such as cathodes, anodes, and electrolytes.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Companies were selected through an auction process, required to commit to <\/span><b>at least 5 GWh capacity<\/b><span style=\"font-weight: 400;\">, meet minimum net worth criteria, and manufacture batteries domestically.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In return, firms could claim subsidies of up to \u20b92,000 per kWh for batteries sold.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To ensure localisation, the scheme mandated <\/span><span style=\"font-weight: 400;\">25% Domestic Value Addition within two years and 60% by the fifth year<\/span><span style=\"font-weight: 400;\">, with the broader goal of reducing battery costs and accelerating the adoption of electric vehicles and energy storage systems.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In the first auction round of the Advanced Chemistry Cell (ACC) PLI scheme, three companies were selected: <\/span><b>Ola Electric<\/b><span style=\"font-weight: 400;\"> (20 GWh), <\/span><b>Reliance New Energy<\/b><span style=\"font-weight: 400;\"> (15 GWh initially, plus 10 GWh in the second round), and <\/span><b>Rajesh Exports<\/b><span style=\"font-weight: 400;\"> (5 GWh).<\/span><\/li>\n<\/ul>\n<h2><b>Why the ACC PLI Scheme Has Struggled<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Unrealistic Timelines for Gigafactories<\/b><span style=\"font-weight: 400;\"> &#8211; The scheme requires beneficiaries to commission facilities within a two-year gestation period, which experts consider impractical for setting up complex battery gigafactories from scratch in a nascent ecosystem.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Challenging Domestic Value Addition (DVA) Norms<\/b><span style=\"font-weight: 400;\"> &#8211; Meeting 25% DVA in two years and 60% in five years has been difficult because India lacks adequate processing capacity for key minerals like lithium, nickel, and cobalt.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Selection Criteria Favoured New Entrants<\/b><span style=\"font-weight: 400;\"> &#8211; The evaluation prioritised DVA and subsidy benchmarks over proven manufacturing experience. As a result, established battery makers such as Exide Industries and Amara Raja did not qualify, leaving the programme largely with relatively inexperienced players.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Dependence on China for Inputs and Know-How<\/b><span style=\"font-weight: 400;\"> &#8211; India\u2019s heavy reliance on China for raw materials, technology, and expertise has slowed progress. Delays in visas for Chinese technical specialists\u2014amid a shortage of domestic skilled labour for cell manufacturing\u2014have become a major bottleneck.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Foundational Capability Gaps<\/b><span style=\"font-weight: 400;\"> &#8211; Many beneficiaries are still building basic technical and operational capabilities, further delaying commissioning and preventing the scheme from meeting its ambitious capacity, investment, and employment targets.<\/span><\/li>\n<\/ul>\n<h2><b>Recommended Fixes for Reviving the ACC PLI Scheme<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The report calls for immediate measures such as fast-tracking visas for technical experts and extending project timelines by at least one year to avoid penalising delayed facilities.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For the long term, it recommends building domestic capabilities through schemes for critical mineral refining and component manufacturing, along with sustained investment in R&amp;D and skill development to strengthen India\u2019s battery ecosystem.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/www.thehindu.com\/sci-tech\/science\/whats-ailing-indias-battery-scheme-for-evs-explained\/article70575253.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s EV battery scheme under the ACC PLI has missed capacity, jobs, and investment targets due to unrealistic timelines, DVA hurdles, and dependence on China.<\/p>\n","protected":false},"author":18,"featured_media":85371,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[5066,60,22,59],"class_list":{"0":"post-85258","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-ev-battery-scheme","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/85258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=85258"}],"version-history":[{"count":4,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/85258\/revisions"}],"predecessor-version":[{"id":85400,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/85258\/revisions\/85400"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/85371"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=85258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=85258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=85258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}