After winning a contest, Reliance Industries and Softbank Group-backed Ola Electric (9984.T) would get incentives under India’s $2.4 billion scheme to encourage domestic battery cell manufacture, according to four people.
Hyundai Global Motors Company and Indian jeweler Rajesh Exports are among the winning bids, according to sources who spoke on the condition of anonymity.
Last year, the Indian government finalized a scheme to encourage firms to manufacture battery cells in India as part of its efforts to build a domestic supply chain for clean transportation and renewable energy storage in order to satisfy the country’s decarbonization targets.
According to the sources, Ola Electric and Hyundai would get incentives for 20 gigawatt-hours (Gwh) of capacity, while Reliance and Rajesh Exports will receive incentives for 5 Gwh. They did not provide a monetary value.
Requests for a response from Reliance and Rajesh Exports were not immediately returned. Hyundai Global could not be contacted for comment right away.
Ola declined to comment on whether it had won the contract but pointed Reuters to a statement it made on Wednesday about its ambitions to manufacture batteries locally. Ola Electric said yesterday that it has added Prabhakar Patil, the former CEO of LG Chem Power, to its board of directors and wants to build a storage capacity of 50 Gwh.
A few Asian businesses dominate battery cell manufacture, notably CATL (300750.SZ), LG Energy Solutions, and Panasonic (6752.T), all of which ship to Indian enterprises. Domestic manufacturing is a priority for the government, which expects to build a total of 50 Gwh of battery storage capacity over the next five years.
A total of ten firms submitted proposals for the production of 130 Gwh of storage capacity. Mahindra & Mahindra (MAHM.NS), Amara Raja (AMAR.NS) and Exide Industries (EXID.NS), and engineering group Larsen & Toubro are among them.
Some businesses have already begun to implement their strategies.
For around $200 million, Reliance bought two battery companies: UK-based Faradion, which develops sodium-ion batteries, and Lithium Werks, which creates lithium iron phosphate batteries.
Exide has formed a long-term technological partnership with China’s SVOLT Energy to build a lithium-ion battery cell manufacturing facility.