The ACC battery PLI: meaning, how it works in India and examples

An advanced chemistry cell is a modern rechargeable battery cell, such as lithium-ion, that stores and releases energy electrochemically. These cells go into electric vehicles, grid storage and electronics. The cell is the most costly part of an electric vehicle battery, and India has imported nearly all of its cells so far, mainly from East Asia.

A gigawatt-hour is a unit of storage capacity equal to one million kilowatt-hours. A factory that makes 5 GWh of cells a year can supply, for example, over a hundred thousand cars with 40 kWh packs, or many times more electric two-wheelers with small packs.

PLI stands for production-linked incentive. The government does not give an upfront grant. It pays an incentive on each unit of battery sold, after the factory has been built and has started production, and only if conditions are met. The Cabinet approved the scheme for ACC battery storage in May 2021 with an outlay of ₹18,100 crore, targeting 50 GWh of manufacturing capacity.

The scheme is run by the Ministry of Heavy Industries. Winners are picked through a competitive bid in which companies promise capacity, a timeline and the incentive they need. The per-unit rate and the exact domestic value addition conditions are in the scheme guidelines, and readers should check the ministry's documents for those numbers.

In the first round in 2022, according to press reports, Ola Electric won 20 GWh, Hyundai Global Motors 20 GWh, Reliance New Energy 5 GWh and Rajesh Exports 5 GWh, adding up to 50 GWh. Hyundai later withdrew, which left part of the target unallocated.

The ministry ran a second bid in 2024 for 10 GWh. Reliance was reported to have won it, although reports differ on whether its total then stood at 10 GWh or 15 GWh. Others that bid, such as Amara Raja and JSW Neo Energy, were reported as waitlisted. For an exact allocation, the ministry's own release is the safest source.

The incentive works as a reward for results. A winning company signs a programme agreement, gives a bank guarantee, and commits to milestones, such as buying land, installing the first capacity and meeting a minimum level of domestic value addition. Incentives are paid over several years on the sales of cells made in India.

The government's aim is that, over time, cells and battery packs made at scale at home lower the cost of electric vehicles and cut import dependence. For a startup that builds batteries or packs, the practical result is a possible local supply of cells at a lower price.

• Bid: a company offers capacity in GWh.
• Agreement: the winner signs a programme agreement and gives a bank guarantee.
• Milestones: land, plant, first production, domestic value addition.
• Incentive: paid on sales, over a set number of years, if the milestones are met.
• Penalty: delays can bring a daily charge and, at the extreme, loss of the guarantee.

A cell factory is a complex plant that needs imported machines, trained engineers and a steady supply of materials. Building one takes years even for experienced firms. By late 2025 an IEEFA assessment reported that only a small share of the 50 GWh target, about 1.4 GWh, had been commissioned, all of it by Ola Electric.

Prices of imported cells also fell sharply as Chinese producers expanded, which made it harder for an Indian plant to compete on cost. Technology partnerships and equipment orders can take time, and some winners have changed their plans.

In March 2025, press reports said the Ministry of Heavy Industries sent notices to Ola Electric, Reliance New Energy and Rajesh Exports for missing their commitments. Ola was reported to face a charge of ₹12.5 lakh a day from 1 January 2025 until the milestone was met. The companies asked for waivers.

In November 2025, reports said the government directed the three to pay the penalties accrued up to 30 September, suggesting that extension and waiver requests had not been accepted. No update on later payments or waivers was found as of November 2026, so that part of the story is still open.

Cheaper and more reliable local cells would help makers of electric two-wheelers, three-wheelers and storage systems. At present, many of them buy imported cells or packs, so a currency swing or a shipping delay directly hits margins. Startups in battery management systems, recycling and swapping also benefit if domestic supply grows.

The risk is the other way round. If the PLI projects stay late, startups keep relying on imports, and the subsidies given to vehicle buyers, such as under PM E-DRIVE, do not lead to a local battery industry. Investors therefore watch commissioning news and penalty news as closely as funding news.

A short list helps to place headlines about the scheme. These figures come from public reports and the ministry's announcements, and should be checked against official documents before use in any decision.

Two points are worth keeping in mind. First, capacity is not the same as production: a company may hold an award for 20 GWh but have only a small plant running, so awarded and commissioned tell very different stories. Second, an incentive on sales means the money arrives only if cells are actually sold, so a plant that makes cells but cannot find buyers earns little from the scheme.

Readers should also watch the timelines. The scheme was approved in 2021, the first winners were named in 2022, and a re-bid followed in 2024. Several years later, as of late 2025, only a small share was commissioned, so any story that claims the scheme has delivered gigawatts of output should be read with care.

• Budget: ₹18,100 crore.
• Target: 50 GWh of cell capacity.
• Approved: May 2021 by the Cabinet.
• First awards: 2022; re-bid for 10 GWh in 2024.
• Commissioned by late 2025: about 1.4 GWh, per IEEFA, all from Ola Electric.
• Reported penalty for Ola: ₹12.5 lakh a day from 1 January 2025.

A PLI pays a maker for production. A vehicle subsidy pays a buyer or a vehicle maker to lower the sticker price. The ACC PLI therefore supports the supply side, while schemes such as PM E-DRIVE and state policies support the demand side.

This guide is general information on public schemes and not investment or legal advice. Scheme terms and awards change, so check the ministry's notices.