Facing continued supply chain disruptions, Ola Electric Mobility (20 GWh), Rajesh Exports (5 GWh), and Reliance New Energy (5 Gwh), who are the beneficiaries of the government’s production-linked incentive (PLI) scheme for advanced chemistry cells (ACC), have requested an extension of the deadline to set up their manufacturing units. The three companies have also asked the government not to impose penalties for their failure to meet the original implementation timelines under the scheme.
According to industry sources, the companies have conveyed to the ministry of heavy industries (MHI) that delays in sourcing critical equipment and machinery, primarily from China, have hindered progress. The entire upstream supply chain, including plant and equipment necessary for battery cell manufacturing, is reportedly affected by curbs on exports and shipment delays from China.
The ACC PLI scheme, announced in 2021 with a financial outlay of Rs 18,100 crore, was intended to support the development of 50 GWh of domestic cell manufacturing capacity. The three companies were allotted 30 GWh of this capacity and were required to meet investment and value addition targets within two years of signing final agreements. Under the scheme’s guidelines, beneficiaries must achieve at least 25% domestic value addition and invest Rs 225 crore per GWh at the mother unit level.
Delays in execution attract penalties amounting to 0.1% of the performance security per day of delay. This translates to Rs 12.5 lakh per day for Ola Electric, and Rs 5 lakh per day each for Reliance New Energy and Rajesh Exports. These amounts are to be deducted from future incentives payable under the scheme.
Ola Electric confirmed that it has initiated trial production at its Gigafactory as of March 2024 and currently has an installed capacity of 1.4 GWh. The company said it is working to scale up to 5 GWh but did not comment directly on its request for a deadline extension. Queries sent to Rajesh Exports and Reliance New Energy remained unanswered.
Sources said Rajesh Exports has also attributed its delays to local protests affecting land acquisition.
Officials said that any extension or relaxation may only be given to the companies concerned after examining the matter in detail.
