Sun Feb 01 03:03:05 UTC 2026: Headline: India’s Ambitious Battery Production Scheme Stumbles, Hampered by Delays and Dependence on China

The Story:
India’s ₹18,100 crore Advanced Chemistry Cell Production Linked Incentive (ACC PLI) scheme, launched in October 2021, aimed to create a domestic battery manufacturing ecosystem, specifically for Electric Vehicles (EVs), and reduce reliance on Chinese imports. However, as of February 2026, the scheme is significantly behind schedule. Only 1.4 GWh of the targeted 50 GWh battery cell production capacity has been installed. The scheme has also fallen short on job creation and investment targets.

The ACC PLI scheme aimed to attract private players and global technology partnerships to lower battery costs, accelerate EV adoption, and boost Energy Storage Systems (ESS). Companies were required to meet Domestic Value Addition (DVA) targets and could claim up to ₹2,000 per KWh in subsidies. However, the scheme faces challenges like unrealistic timelines, difficulties in meeting DVA requirements due to a lack of domestic mineral processing facilities, and delays in visa approvals for Chinese technical specialists.

Key Points:

  • The ACC PLI scheme, launched in October 2021, targeted 50 GWh of battery cell production by 2025.
  • As of October 2025, only 1.4 GWh (2.8%) of the targeted capacity has been commissioned, solely by Ola Electric.
  • Zero funds have been disbursed as beneficiaries haven’t met the necessary milestones.
  • Only 1,118 jobs have been created (0.12% of the estimated 1.03 million).
  • The scheme attracted only 25.58% of its targeted investment.
  • Key challenges include a two-year “gestation period” deemed unrealistic for building gigafactories, stringent DVA requirements, and delays in visa approvals for Chinese technical specialists.
  • Ola Electric, Reliance New Energy, and Rajesh Exports were the selected beneficiaries in the first auction round.

Key Takeaways:

  • India’s ambition to establish a self-reliant battery manufacturing ecosystem is facing significant hurdles.
  • Over-reliance on foreign expertise, particularly from China, is hindering progress.
  • Unrealistic timelines and stringent DVA requirements are impeding the successful implementation of the ACC PLI scheme.
  • The scheme’s design prioritized DVA and subsidy benchmarks over prior manufacturing experience, potentially excluding more experienced players.
  • Government intervention is needed to fast-track visa approvals, extend implementation timelines, and develop domestic capabilities in mineral refining and component manufacturing.

Impact Analysis:

The failure of the ACC PLI scheme to meet its targets has several long-term implications:

  • Delayed EV Adoption: Higher battery costs due to a lack of domestic manufacturing will slow down the adoption of EVs in India, hindering the country’s efforts to reduce carbon emissions and meet its climate goals.
  • Continued Dependence on China: Failure to develop a domestic battery manufacturing ecosystem will perpetuate India’s reliance on Chinese imports for batteries and related components, increasing its vulnerability to supply chain disruptions and geopolitical risks.
  • Setback to Energy Storage Goals: Slow progress in battery manufacturing will impede the deployment of Energy Storage Systems (ESS), hindering the integration of renewable energy sources into the grid and impacting India’s energy security.
  • Reputational Damage: The scheme’s failure to deliver on its promises could damage India’s reputation as a reliable destination for foreign investment and hinder its efforts to attract global technology partnerships.
  • Need for Policy Adjustments: The shortcomings of the ACC PLI scheme highlight the need for policy adjustments, including more realistic timelines, flexible DVA requirements, and proactive measures to develop domestic capabilities in critical minerals processing and talent development. The Indian government needs to take immediate actions.

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