Government taps global firms for local battery production: Report

The move is a part of the broader $2.4 billion incentive program to increase battery production locally

  • Money9
  • Updated On - October 27, 2021 / 12:59 PM IST
Government taps global firms for local battery production: Report
In order to qualify for the incentives, companies must set up a minimum of 50 Gigawatt hours (Gwh) of battery storage capacity in the next five years, which is expected to attract a direct investment of about $6 billion.

In a move to establish a domestic supply chain for a clean transport, the government is planning to pitch to companies like Tesla Inc, Samsung and LG Energy to encourage them to invest in manufacturing batteries locally, according to a Reuters report. Starting next month, India will host five roadshows in countries like the United States, Germany, France, South Korea and Japan to convince battery makers to set up local production.

Though a delegate list is yet to be confirmed, Tesla, LG Energy and Samsung are among those who will be invited to attend. Other companies targeted include Northvolt, Panasonic and Toshiba.

The move is a part of the broader $2.4 billion incentive program to increase battery production locally for which investment proposals have been invited from companies by the government.

India’s plans comes ahead of the United Nations Climate Change Conference in Glasgow, next week. The country sees clean auto technology as a strategic measure to control pollution in major cities and also reduce dependency on oil, while meeting the emission targets at the same time.

Due to the high price of imported batteries, Electric Vehicles (EVs) continue to make up a fraction of total sales in India. However, growth is picking up as the government is offering incentives to automakers and EV buyers.

In order to qualify for the incentives, companies must set up a minimum of 50 Gigawatt hours (Gwh) of battery storage capacity in the next five years, which is expected to attract a direct investment of about $6 billion.

Global players not showing interest

According to the publication, domestic players like Reliance Industries, Adani Group and Tata Group have shown interest, but there has been a little enthusiasm from the global players.

It added that, global companies are refusing to come in without a local partner, owing to the huge investment. Also, India ranks poorly on contract enforcement.

Others, however are choosing bigger markets like the US and Europe for investment, where demand for batteries are higher.

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