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News18 » Auto
3-min read

Tesla Shows Interest to Invest in India’s Battery Manufacturing Plants

The interest follows the Indian government’s push towards making the country a global manufacturing hub for electric vehicles and their components.

Trending Desk

Updated:August 19, 2019, 5:14 PM IST
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Image for representation. (Photo: Reuters)

Initial interest has been shown by Tesla and China’s Contemporary Amperex Technology Co. Ltd (CATL) in the Indian government’s plan to build large factories to make lithium-ion batteries, reported LiveMint, adding that the investment of the plan is about Rs 50,000 crore.

China’s BYD Co. Ltd is another firm that has also shown an interest in the mega project, the report mentioned two government officials aware of the matter saying, requesting anonymity.

The interest follows the Indian government’s push towards making the country a global manufacturing hub for electric vehicles and their components.

According to LiveMint, the move is aimed at cementing India’s reputation as the world’s third-largest crude oil importer, saving on precious foreign exchange and also helping control pollution in its major cities.

“This is a multibillion-dollar opportunity. The EFC (expenditure finance committee) meeting has been done. It will now come up in the cabinet,” LiveMint quoted one of the two government officials saying.

Aimed at meeting India’s energy needs, the plan to set up these 50-gigawatt hour (GWh) factories have been cleared by EFC, with the final tender likely to be getting approval by February. According to the report, each gigawatt-hour (1,000-megawatt hours) of battery capacity can power 1 million homes for an hour and around 30,000 electric cars.

Meanwhile, Tesla is yet to launch its electric cars in India, with its chief executive Elon Musk blaming the decision on and “extremely high” import duties in India and “challenging government regulations”.

It comes despite Transport Minister Nitin Gadkari’s visit to the Palo Alto, California-based company in 2016 and offered to promote joint ventures between the electric carmaker and Indian automobile companies to introduce pollution-free road transport in India. In 2015, Prime Minister Narendra Modi also visited Tesla’s California facility. The idea to build the Giga plants is helmed by NITI Aayog and aims to achieve what Tesla has done at its Gigafactory in Nevada, US.

According to LiveMint, the programme also aims to be technology-agnostic, which means that it will be left to the market to determine which technology is best suited for the country, depending on demand and price.

“We are expecting all cabinet clearances by September. Post that, the international tender will be floated. The EFC clearance has come. The evaluation won’t take much time. The minimum ceiling for bidding is 5GWh, with the maximum allowed quantum of 20GWh,” the LiveMint quoted the second government official says.

A conservative vision envisaged by NITI Ayog sees India needing six such gigawatt-scale facilities by 2025 and 12 by 2030. While this does not include the export market potential, the base scenario envisions 11 such Giga factories by 2025 and 24 by 2030.

“Large batteries should be brought to the clean energy play to help use infirm power such as wind and solar. We first need it on a large scale to cater to internal demand. All the top global manufacturers, including Tesla, have evinced interest. We will get more clarity once the tender documents are bought,” the second official told LiveMint.

According to the report, apart from electric vehicles, battery storages will also cater to electricity grids, given the intermittent nature of electricity from clean energy sources such as solar and wind.

Notably, India has become one of the top renewable energy producers globally with an installed renewable energy capacity of about 80 gigawatts (GW). The country has plans to achieve 175GW by 2022 and 500GW by 2030, as part of its climate commitments.

In the 2019-2020 Union Budget tabled in July, Finance Minister Nirmala Sitharaman announced tax breaks for setting up mega manufacturing plants for solar photovoltaic cells, lithium-ion storage batteries and solar electric charging infrastructure.

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| Edited by: Anirudh SK
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