India is launching a bidding process for an 80 billion rupees ($960 million) incentive initiative aimed at fostering the production of electric vehicle batteries, according to insiders familiar with the matter.
The initiative mandates successful bidders to establish cutting-edge chemistry battery plants capable of generating a combined output of 20 gigawatt hours.
The government will give incentives to companies over a period of five years on the sale of batteries manufactured locally.
People familiar with the matter, who preferred to remain anonymous due to the confidential nature of the plans, revealed that the government intends to solicit bids from potential investors in the coming month.
According to a report by RMI India, a research center, and the government's think tank Niti Aayog, the demand for batteries is anticipated to surge to 260 gigawatt hours by 2030. A surge driven by the expanding market for electric vehicles, grid-scale energy storage, and consumer electronics.
The battery program comes as the country looks to increase adoption of less polluting transport. Prime Minister Narendra Modi’s administration is considering a reduction in import taxes on battery-powered vehicles, a move aimed at attracting Tesla Inc. (NASDAQ:TSLA).
Additionally, the administration is actively encouraging domestic EV production through a $3.1 billion incentive program launched in 2021.
Shares of TSLA are up 0.45% in pre-market trading Monday morning.