Categories: News

Explainer: ‘Battery war’ begins among auto companies in India, Tesla is seeking special treatment from the government

New Delhi : The ‘Battery War’ has started among the auto companies for the manufacture of Advanced Chemical Cell (ACC) to be installed in Electric Vehicles (EVs) in India. Last Friday, the government invited bids for the second time under the Production Linked Incentive Scheme (PLI Schme) for the manufacture of batteries for electric vehicles. After inviting bids from the government, Japanese electric and electronic goods manufacturer Panasonic has met officials of the relevant ministries of the government to manufacture advanced chemical cells in India. During this meeting, government officials have advised Panasonic’s representatives to submit applications under the PLI scheme, but American electric vehicle manufacturer Tesla wants special treatment (change in policy and rules) from the government for the manufacture of advanced chemical cells in India. The government has made it clear that Tesla will not get any special treatment for manufacturing advanced chemical cells in India.

No plan to bring separate policy for Tesla: Government

According to a media report, the Government of India has made it clear that there is no plan to introduce any separate policy to encourage American electric car maker Tesla. According to the news quoting a government official, Tesla may apply for support measures under the Production Linked Incentive Scheme (PLI Scheme) for the vehicle or advanced chemistry cell.

Elon Musk will come to India in 2024

Elon Musk, head of the world’s largest electric car company Tesla Inc, met Prime Minister Narendra Modi in New York last month. At that time Prime Minister Modi had gone on a two-day visit to America on the invitation of President Joe Biden and his wife. During this, apart from American industrialists, he had also met Indians. During this visit, Elon Musk met him. After meeting Prime Minister Modi, Musk had said that he plans to visit India in 2024.

Government has already introduced PLI scheme

The government has already introduced PLI scheme for Advanced Chemistry Cell (ACC) battery storage with an outlay of Rs 18,100 crore. Apart from this, a PLI scheme of Rs 26,058 crore has been brought for the vehicle, vehicle components and drone industry. At present, cars imported as a completely built unit (CBU) attract a customs duty of 60 to 100 per cent depending on the engine size and cost, insurance and freight (CIF) value.

one-size-fits-all policies

The official said that ‘we have told Tesla that the policies which are already in place for everyone, can also apply under them. He is welcome. Generally the policies are the same for all. The government cannot make a different policy for a company. In such a situation, there is no plan to treat them specially. Tesla representatives visited the country last month to meet officials from various ministries, including the commerce and industry. America’s electric car manufacturer had demanded a cut in import duty on electric vehicles in India in 2021.

Suggested to apply to Panasonic

The official said that representatives of Panasonic, the largest supplier of batteries to Tesla, have met us. They have said that they want to make batteries. We have suggested them to apply under PLI ACC Battery.

Government invites bids

Let us tell you that in order to increase the production of batteries (advanced chemistry cells) used in electric vehicles (EV) in India, the Central Government has invited bids on last Friday i.e. July 21, 2023, under the Production Related Incentive Scheme (PLI Scheme). Under this Rs 18,100-crore program, the government aims to promote state-of-the-art chemical battery (Advanced Chemistry Cell-ACC) manufacturing of the remaining 20 GWh capacity. The Government of India has set a target of zero carbon emissions by the year 2070 along with reducing environmental pollution and dependence on fossil fuels.

Consultation with industry representatives

The Ministry of Heavy Industry will hold stakeholder consultations with industry representatives on July 24, 2023 to seek their views and suggestions before resuming the bidding process for the remaining 20 GW capacity from July 24. According to a statement, the ministry is committed to finalizing the bid documents and taking the process forward at the earliest. With this auction process, prospective applicants can submit their bids for setting up a plant in India for manufacturing ‘Advanced Chemistry Cell’. This will help them to get eligibility for incentives under ACC PLI Scheme.

What is Advanced Chemistry Cell

Let us tell that chemical battery (Advanced Chemistry Cell-ACC) is the advanced storage technology of new generation. It can store electrical energy in the form of electrochemical or chemical energy and convert it back to electrical energy when needed. It can be mainly used in electric vehicles, maintaining grid stability, rooftop solar projects, consumer electronics etc.

Zero carbon emission target by 2070

India has set a target of net zero carbon emissions by 2070. Along with this, the role of energy storage is very important with the commitment towards renewable energy. The government had approved the PLI scheme ‘National Program on ACC Battery Storage’ to achieve a manufacturing capacity of 50 gigawatt hours (GWh) of ACC to enhance the manufacturing capacity with a budgetary outlay of Rs 18,100 crore. The thrust of the government under this initiative is to ensure that the cost of battery manufacturing in the country is globally competitive while achieving domestic value addition.

Where is ACC used?

Electric batteries are active participants in smart power supply grids, with smart metering used in electric vehicles (vehicle-to-grid) and home energy storage, and which are connected to smart grids for demand response. The biggest thing is that these batteries can be used again in a new way. In addition, these batteries also reduce energy storage cost and reduce the effects of pollution and carbon emissions due to longer life. Grid scale energy storage envisages the large scale use of batteries to collect and store energy from the grid or power plant and then later discharge that energy to provide electricity or other grid services when needed.

Tesla is a multinational automotive and clean energy company.

Tesla Inc. is an American multinational automotive and clean energy company headquartered in Austin, Texas. Tesla designs and manufactures electric vehicles (cars and trucks), home to grid-scale stationary battery energy storage devices, solar panels and solar plate tiles, and other related products and services. Tesla is one of the most valuable companies in the world. In 2022, the company has been leading the battery electric vehicle market with 18 percent share. Tesla Energy has been one of the largest global suppliers of battery energy storage systems, with 6.5 gigawatt-hours (GWh) installed by 2022.

Elon Musk became Tesla’s largest shareholder in 2004

Tesla was founded as Tesla Motors in July 2003 by Martin Eberhard and Mark Tarpenning. The company is named after the inventor and electrical engineer Nikola Tesla. In February 2004, Elon Musk became the company’s largest shareholder with an investment of $6.5 million. After this he became the CEO (Chief Executive Officer) of Tesla in 2008. Tesla’s stated mission is to help accelerate the move towards sustainable transportation and energy achieved through electric vehicles and solar power.

Tesla’s first roadster sports car made in 2008

Tesla started production of its first car model, the Roadster sports car, in 2008. This was followed by the Model S sedan in 2012, the Model X SUV in 2015, the Model 3 sedan in 2017, the Model Y crossover in 2020, and the Tesla Semi truck in 2022. The company plans to produce the Cybertruck light-duty pickup truck in 2023. The Model 3 is the best-selling plug-in electric car ever worldwide and became the first electric car to sell 1 million units globally in June 2021. Tesla’s 2022 deliveries were about 1.31 million vehicles, up 40 percent from last year. Tesla’s market capitalization temporarily reached $1 trillion in October 2021, the sixth company in US history to do so.


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