Top Companies Race to Seize India’s ACC Manufacturing Opportunity

As of April 23, 2024, India has received seven bids under the Production Link Incentive Scheme for 10 GWh (gigawatt-hour) Advanced Chemistry Cell (ACC) manufacturing. The critical component is used in electric vehicles (EV), renewable energy storage, consumer electronics, power backup, etc. The response from major companies is a positive sign and aligns with India’s vision of becoming a green-tech hub, lowering manufacturing costs, and dialing back EV component imports. 

India’s Ministry of Heavy Industries (MHI) has received bids from seven companies in response to a global tender for the re-bidding of Production-Linked Incentives (PLI) for the manufacturing of 10 GWh Advanced Chemistry Cells (ACC).

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India announced in January 2024 that a re-bidding process would be opened to a limited number of bidders for the establishment of mega battery manufacturing facilities with a 10 GWh capacity, at a cost of INR 36.2 billion (US$434 million). The pre-bid meeting took place on February 12, 2024, and the deadline for applications was April 22, 2024, via the Central Public Procurement Portal. Technical bids were opened on April 23, 2024.

Top companies’ line-up for ACC manufacturing

In an official announcement made by the central government, the latest bidder list includes ACME Cleantech Solutions Private Limited, Amara Raja Advanced Cell Technologies Private Limited, Anvi Power Industries Private Limited, JSW Neo Energy Limited, Reliance Industries Limited, Lucas TVS Limited, and Waaree Energies Limited. Altogether, these companies have bid for a total capacity of 70 GWh, which is seven times more than the manufacturing capacity that is to be awarded.

The ministry issued a Request for Proposal (RfP) on January 24, 2024, for the shortlisting and selection of bidders under the PLI Scheme for the ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage.’ The objective is to set up ACC Manufacturing Units with a total manufacturing capacity of 10 GWh and a maximum budgetary outlay of INR. 36.2 billion.

Supporting India’s battery storage and EV capacity

In May 2021, the PLI scheme for the ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ was initially authorized with a budget outlay of INR 181 billion (US$2.17 billion). The goal is to reach 50 GWh of ACC and 5 GWh of “niche” ACC manufacturing capacity.  The first round of bidding for the ACC PLI concluded in March 2022, resulting in three beneficiary firms, i.e., Ola Electric, Rajesh Exports, and Hyundai Global Motors Company, being allocated a total capacity of 30 GWh. 

Key takeaways

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At a compound annual growth rate (CAGR) of around 50 percent, the ACC battery market demand in India is predicted to increase from 20 GWh in 2022 to about 220 GWh by 2030.

According to a report titled “Raw Materials for Battery & Component Manufacturing,” published August 2023, a strong local supply chain and a booming local battery manufacturing industry are essential to sustain the growth of ACC manufacturing. This would mean localizing a sizable chunk of the whole value chain, from material processing to pack assembly and integration – in keeping with India’s ambitions for the EV industry.

Foreign investors in the manufacturing space and other such stakeholders should pay attention to the emerging capacity building in the Indian ACC manufacturing industry and forge supplier relationships with PLI beneficiaries to achieve mutually advantageous outcomes.

(US$ 1= INR 83.32)

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