Govt Wants Tesla, Samsung To Make Batteries In India; Offers Rs 35,000 Cr Incentives

There hasn’t been much interest expressed by global players so far.

India is hoping to rope in companies such as Tesla, Samsung and LG Energy to build batteries in the country.


Roadshows As Investor Pitches

To that end, it will host five roadshows starting next month in countries such as the US, Germany, France, South Korea and Japan.

Through these, it will invite battery makers to invest in local production.

Tesla, LG Energy and Samsung have been invited to attend the shows along with Northvolt, Panasonic and Toshiba.

Incentive Program

It is a step towards establishing a domestic supply chain for clean transport and part of a larger  incentive program worth $4.6 billion.

Through the program, India is seeking to establish a total of 50 gigawatt hours (Gwh) of battery storage capacity over five years.

The work is expected to attract direct investment of about $6 billion.

To become eligible for the incentives, companies will have to establish a minimum of 5 Gwh of storage capacity and meet certain local content conditions.

Value Of Global Players

This would require a minimum investment of more than $850 million.

It would work towards boosting battery manufacturing and has invited investment proposals for the same.

Bringing in foreign firms would lead to infusion of good technology, quality and safety standards.

There hasn’t been much interest expressed by global players so far.

But domestic companies such as Reliance Industries, Adani Group and Tata Group are willing to step up.

Lack Of Interest?

The hesitation from foreign companies stems from its unwillingness to enter the country independently without a local partner.

They have to team up with a local player as it requires large investment and India ranks poorly on contract enforcement.

They are instead looking elsewhere in bigger markets such as the US and Europe where the demand for batteries is also higher.

Furthering Green Goals

India’s plans come ahead of the United Nations Climate Change Conference (COP26) to be held next week in Glasgow.

Pertaining to climate change, its strategy revolves around clean auto technology.

Its use would help curb pollution, reduce oil dependence and meet its emissions targets.

At present, electric vehicles (EV) make up a negligible amount of total sales in India with consumers hesitating due to their high price owing to imported batteries.

Future Plans For EVs

But its growth is on an upward trend thanks to the government offering incentives to automakers and EV buyers.

It has targeted 2030 for EVs to reach 30% of total private car sales.

The target for electric motorcycles and scooters is 40% of total sales.

Making progress on these aims will help push demand for batteries the costs of which can be brought down with local production.

It currently contributes about 35% to 40% of the total vehicle cost.

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