Homegrown vehicle manufacturer Mahindra Group is currently considering the establishment of a cell manufacturing plant in the country. The company has shown interest in the second tender of the Advanced Chemistry Cell (ACC) Production Linked Incentive (PLI) scheme, as evidenced by their participation in a pre-bid meeting.
The group is currently evaluating two to three locations in different states for the potential ACC manufacturing unit, revealed sources to CNBC-TV18. However, the final investment plans are yet to be confirmed.
“The investment plans have not yet been finalised, getting a PLI approval would be a major factor in the company’s decision to set up a cell manufacturing plant,” said a source requesting anonymity.
The same source also mentioned that Mahindra Group is exploring the possibility of setting up a cell manufacturing plant for internal use. This would be a significant move for the company, as it would support its electric mobility programme.
A spokesperson for Mahindra & Mahindra (M&M), in response to CNBC-TV18’s query, stated “We are currently in the process of finalising our plans for the ACC PLI application and will announce the relevant details in due course. We have not yet applied, given the deadline date of April 2024.”
During a recent analyst call, the leadership of the Mahindra Group expressed that they were considering battery manufacturing as a future possibility. They mentioned, “We’ve said in the past that we would at some stage have a conversation with VW on localising cells in India. That hasn’t made a lot of progress yet. Doesn’t mean that’s not happening, but that’s the next stage of work that we need to get to.”
The company also stated that there is an inclination to get into battery manufacturing, but this inclination needs a thorough evaluation of all benefits.
PLI incentives are crucial for a company like Mahindra Group from a profitability and margin point of view. The company has received PLI approval for electric last-mile mobility vehicles and expects disbursements to start flowing in Q1 of FY25.
M&M is likely to meet domestic value addition criteria under PLI for e-XUV400 by Q2 FY25. As the company’s SUVs are not eligible for FAME subsidies, ACC PLI incentives will further help the group in reducing EV manufacturing costs and also in meeting localisation targets.
The pre-bid meeting for the second global tender for ACC PLI saw participation from 18 companies, including Reliance, JSW, Hyundai, TVS Lucas, L&T, Amara Raja, Exide, BHEL, Nsure, Anvi Power, Godi India, ACMA, Ather, PACE Digitek, PMI Electro, Clean Electric and Neoron Energy.
Ola, Reliance, and Rajesh Exports had qualified for the first round of ACC PLI with an allotment of 30GWH capacity. The Ministry of Heavy Industries is now opening bids for 10 GWH ACC capacity out of the remaining 20 GWH capacity under the PLI scheme, which has a total outlay of Rs 18,100 crore.
