Explainer: ‘Battery war’ between auto companies in India has begun, with Tesla seeking special treatment from the government

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New Delhi: A ‘battery war’ has begun between auto companies to manufacture Advanced Chemical Cells (ACC) installed in Electric Vehicles (EVs) in India. Last Friday, the government invited bids for the second time under the Production Linked Incentive Scheme (PLI Scheme) for manufacturing electric vehicle batteries. After inviting bids from the government, Japanese electrical and electronic products maker Panasonic has met officials of the concerned government ministries to develop advanced chemical cells in India. In this meeting, government officials advised Panasonic’s representatives to submit an application under the PLI scheme, but American electric vehicle maker Tesla wants special treatment (change in policy and rules) from the government to manufacture 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 plans to introduce separate policy for Tesla: Govt

According to a media report, the Indian government has made it clear that there are no plans to introduce a separate policy to encourage American electric car maker Tesla. Tesla may apply for support under the Production Linked Incentive Scheme (PLI Scheme) for vehicles or advanced chemistry cells, according to news reports citing a government official.

Elon Musk will come to India in 2024

Elon Musk, the 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 went on a two-day visit to America on the invitation of President Joe Biden and his wife. During this time, apart from American industrialists, he also met Indians. Elon Musk met him during this visit. After meeting PM Modi, Musk said he plans to visit India in 2024.

Government has already introduced PLI scheme

The government has already launched the PLI scheme for Advanced Chemistry Cell (ACC) battery storage at a cost of Rs 18,100 crore. Also, a PLI scheme of Rs 26,058 crore has been brought in for the car, vehicle component and drone industries. Currently, cars imported as completely built units (CBUs) attract 60 to 100 percent duty depending on engine size and cost, insurance and freight (CIF) value.

One-size-fits-all policy

The official said that ‘we have told Tesla that policies already in place for everyone, can be applied under. He is welcome. Generally the policy is same for all. Government cannot make a separate policy for a company. There is no special treatment plan for them in such situations. Tesla representatives visited the country last month to meet with officials from various ministries, including commerce and industry. The American electric car maker had demanded a cut in import duty on electric vehicles in India in 2021.

It is recommended to apply to Panasonic

“Representatives from Panasonic, Tesla’s largest battery supplier, have met us,” the official said. They said they wanted to make batteries. We advised them to apply under PLI ACC Battery.

Government invites tenders

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

Consultation with industry representatives

The Ministry of Heavy Industries will consult stakeholders with industry representatives on July 24, 2023 before resuming the bidding process for the remaining 20 GW of capacity from July 24. According to a statement, the ministry is committed to finalizing the tender documents and speeding up the process. Through this auction process, prospective applicants can submit their bids for setting up a plant in India to manufacture ‘advanced chemistry cells’. This will help them qualify for incentives under the ACC PLI scheme.

What is Advanced Chemistry Cell?

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

Aim for zero carbon emissions by 2070

India has set a target of net zero carbon emissions by 2070. In addition, the role of energy storage is crucial with the commitment to renewable energy. The government approved the PLI scheme ‘National Program on ACC Battery Storage’ to acquire 50 gigawatt hours (GWh) generation capacity of ACC to increase generation capacity with a budget outlay of Rs 18,100 crore. The government’s emphasis under this initiative is to ensure that battery manufacturing costs in the country are globally competitive while achieving domestic value addition.

Where is ACC used?

Electric batteries are active participants in smart power supply grids, including smart metering used in electric vehicles (vehicle-to-grid) and home energy storage, and which are connected to smart grids for demand response. The most important thing is that these batteries can be used again. In addition, these batteries also reduce energy storage costs and reduce the impact of pollution and carbon emissions due to longer life. Grid-scale energy storage envisions the large-scale use of batteries to collect and store energy from the grid or power plants and then 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 home electric vehicles (cars and trucks), 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 is leading the battery electric vehicle market with an 18 percent share. Tesla Energy is 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 Terpening. The company is named after inventor and electrical engineer Nikola Tesla. In February 2004, Elon Musk became the company’s largest shareholder with an investment of $6.5 million. He then became Tesla’s CEO (Chief Executive Officer) in 2008. Tesla’s stated mission is to help accelerate the move toward sustainable transportation and energy achieved through electric vehicles and solar power.

2008 Tesla’s first Roadster sports car

Tesla began production of its first car model, the Roadster sports car, in 2008. It 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 launch the Cybertruck light-duty pickup truck in 2023. The Model 3 is the best-selling plug-in electric car of all time worldwide and became the first electric car to sell 1 million units worldwide in June 2021. Tesla’s 2022 deliveries were about 1.31 million vehicles, up 40 percent from last year. Tesla’s market capitalization tentatively reached $1 trillion in October 2021, the sixth company in US history.

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