India Plans Battery PLI to Boost EV Adoption

18 Oct 2023 CW Team

The Indian government is actively developing a new Production Linked Incentive (PLI) program for batteries, aimed at reducing storage costs and promoting the adoption of electric vehicles (EVs) in the country. Union Minister for Power and New & Renewable Energy, R K Singh, emphasised the inevitability of an electric future and the importance of decreasing storage costs. He noted that once storage costs come down, traditional diesel and petrol SUVs will become obsolete.

During the launch of an EV dashboard created by the OMI Foundation, Singh highlighted that pricing is a major obstacle to EV adoption, primarily due to high storage costs. To address this issue, he announced the government's plan to introduce another PLI program to boost manufacturing capacity and production volumes, ultimately leading to cost reduction.

Additionally, Singh discussed the challenge posed by the concentration of lithium resources in a few countries. He emphasised the need to diversify into alternative chemistries, like sodium-ion batteries, to secure the EV supply chain.

In a positive development, EV sales in India surged to 371,214 units in the third quarter of 2023, marking a 40 per cent year-over-year increase from the 264,781 units sold in the same period the previous year.

The government's commitment to promoting EVs is underscored by a recent recommendation from a parliamentary committee to extend the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) Phase II initiative until 2027. The goal is to make EVs more affordable in India, given that electric vehicles remain relatively costly. The committee pointed out the need for continued subsidies to encourage EV adoption, especially for electric two-wheelers, in light of FAME-II's original target of supporting 1,562,090 vehicles over five years not being met.

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