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National Programme on ACC Battery Storage - Current status
- According to the Institute for Energy Economics and Financial Analysis (IEEFA) South Asia and JMK Research, the Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage has achieved only 2.8% of its targeted manufacturing capacity in four years.
What is Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) Battery Storage?
- It is also known as the National Programme on ACC Battery Storage, is part of ''Make in India'' and the clean energy strategy.
- Objectives: Launched in 2021 by the Ministry of Heavy Industries, to reduce import reliance, especially on China, by strengthening the domestic ecosystem for electric mobility and grid energy storage.
- Budgetary Outlay: ₹18,100 crore
- Primary Target: To establish 50 Gigawatt-hours (GWh) of domestic ACC manufacturing capacity.
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What are Advanced Chemistry Cells (ACC)?
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Key Mandates for Beneficiaries:
- Achieve a minimum Domestic Value Addition (DVA) of 25% initially, scaling up to 60% within five years.
- Make a mandatory investment of ₹225 crore per GWh of committed capacity within a two-year period.
Current Status and Progress (Source: IEEFA & JMK Research)
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Metric
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Target
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Achievement (as of late 2025 reporting)
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Percentage Achieved
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Manufacturing Capacity
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50 GWh
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1.4 GWh (Commissioned entirely by Ola Electric)
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2.8% |
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Investment Mobilized
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₹11,250 crore
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₹2,870 crore
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25.6% |
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Job Creation
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1.03 million
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1,118 jobs
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0.12% |
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Incentive Disbursal
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₹2,900 crore (planned)
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Zero
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0% |
Challenges Hindering the Scheme''s Success
- Stringent Domestic Value Addition (DVA) Norms: Requirement to achieve 25% DVA quickly and scale it to 60% is a major challenge for new entrants in a nascent Indian component ecosystem.
- Aggressive Timelines: A two-year period to establish complex manufacturing facilities has proven too ambitious, compounded by procedural delays like obtaining visas for technical experts.
- Flawed Evaluation Criteria: Bidding process favored new entrants over experienced battery makers like Exide, who failed to qualify due to higher weightage given to DVA commitments and subsidy quotes.
- Lack of technical skill: Finally, India’s dependency on China for raw material, technical competency and knowhow has led to sluggish progress. A major bottleneck is the delay in visa approvals for Chinese technical specialists, as India lacks skilled workforce for cell manufacturing.
Way Forward
Adopt a Holistic Value-Chain Approach
- Move beyond just cell manufacturing. Introduce dedicated incentive schemes for critical mineral sourcing, refining, component manufacturing, and recycling infrastructure.
Re-evaluate Timelines and Penalties
- Extending timelines and providing temporary relief from penalties to give beneficiaries the necessary time to overcome initial hurdles.
Attract Global Expertise
- Create a more favorable environment for established global battery manufacturers to invest and facilitate technology transfer.
Strengthen Ancillary Infrastructure
- Invest in robust cell testing and certification facilities and launch focused programs for skill development and R&D.
Implement Calibrated Tariff Protection
- Use measures like Basic Customs Duty (BCD) to protect the nascent domestic industry from unfair competition and predatory pricing.
Lessons from Global Best Practices
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Country/Region
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Core Strategy
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Key Features
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China
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Holistic Ecosystem Development
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Dominates the entire value chain, from mineral refining to component manufacturing. Domestically produced 79% of the world''s natural graphite in 2024.
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United States
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Strong Financial Incentives
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The Inflation Reduction Act (IRA) offers tax credits and subsidies to boost domestic production and attract global manufacturers.
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European Union
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Regulatory Framework for Circular Economy
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Mandates stringent battery collection, recycling efficiency, and recycled content. By 2031, new batteries must contain at least 16% recycled cobalt and 6% recycled lithium. (Source: European Commission).
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Conclusion
- The ACC PLI scheme, vital for India''s energy security and ''Aatmanirbhar Bharat,'' is failing due to design flaws that underestimated the complexity of establishing a battery manufacturing ecosystem. To achieve self-reliance in the global battery market, India needs a strategic reset focusing on the entire value chain, realistic timelines, and a supportive environment.
POSTED ON 23-02-2026 BY ADMIN
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