The Ministry of Heavy Industries has extended the Production-Linked Incentive (PLI) scheme for advanced battery cells by two years to 2031, citing global supply chain challenges. Ola Electric and Reliance New Energy will benefit from the adjustment, while Rajesh Exports remains excluded due to regulatory investigations. The move acknowledges difficulties in sourcing specialized machinery and scaling domestic production.
The Indian government has extended the timeline for its ₹18,100 crore Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC) by two years, now moving the target to 2031. This decision provides critical support to major beneficiaries, including Ola Electric and Reliance New Energy, who have struggled to meet original deadlines due to supply chain complications.
For Ola Electric, the timeline adjustment is significant. In an exchange filing on August 12, 2026, the company confirmed that this extension unlocks up to ₹7,240 crore in potential incentives, which are planned to be disbursed in quarterly installments. This allows the companies more room to set up complex manufacturing facilities for advanced batteries, which are essential for electric vehicles and renewable energy storage.
While the government has offered this support to most participants, not all companies have received the extension. Rajesh Exports has been excluded from this timeline revision. This exclusion follows ongoing investigations by the Securities and Exchange Board of India (SEBI) regarding the company's governance and financial reporting practices. For investors, this highlights the regulatory risks that can impact participation in government schemes.
The need for an extension stems from the high complexity of setting up battery manufacturing in India. Companies have faced persistent hurdles in sourcing specialized machinery and recruiting skilled technical labor, particularly from China, which currently leads in the production of high-end battery equipment. Additionally, the technology itself remains in a developing stage within India, making early-stage execution difficult.
Currently, the sector has seen slow progress against its ambitious goals. Out of the 40 GWh of capacity that was originally awarded under the scheme, only 1.4 GWh is operational as of mid-August 2026. This gap underscores the challenges companies face in scaling up their production lines to meet the government’s requirements for Domestic Value Addition, which mandates that a high percentage of battery components must be made within India.
Investors should track the upcoming project commissioning timelines and the ability of these companies to manage the high capital expenditure required for these facilities. The key monitorable remains whether the companies can successfully navigate supply chain risks and meet the stringent local manufacturing criteria to qualify for the full incentive amounts in the coming years.