New Delhi/Mumbai: The Centre has given a deadline extension to two of three companies that were awarded contracts to build batteries for automotive and industrial uses, according to two government officials aware of the development and the ministry of heavy industries (MHI).
While Ola Electric and Reliance New Energy (a subsidiary of Reliance Industries) were given the extension to complete their respective projects by 2031, the third beneficiary, Rajesh Exports Ltd, was not given one in light of a Sebi investigation into governance issues in the company.
All three companies that were awarded capacity under the ₹18,100-crore production-linked incentive scheme for advanced chemistry cells (PLI ACC) in the first tranche in 2022, missed their deadline of investing ₹225 crore per gigawatt hour (GWh) in the first two years.
So far, only 1.4GWh (from ) is operational of the 40GWh worth contracts awarded under the PLI ACC scheme, according to government data.
Replying to Mint’s query, the MHI said in an emailed response that the extension of timeline till 2031 for the scheme was granted to Ola Electric for its committed 20GWh capacity and Reliance New Energy for the 5GWh that it won in the first round of bidding.
Reliance had won another 10GWh in further rounds with a gestation period till July 2027 and incentives till 2032, which has not received any extension.
According to a 6 August report of the Department-related Standing Committee on Industry in the Rajya Sabha, the MHI is of the view that PLI ACC beneficiaries will have an installed capacity of 11GWh by December 2026, with Ola Electric raising its capacity from 1.4GWh to 6GWh, and setting up 5GWh.
In March, the MHI had told the Rajya Sabha’s Department-related Standing Committee on Industry that cell makers could not meet targets under the scheme because of challenges in obtaining skilled manpower and specialised machinery as well as raw material.
The extension for the 2022 awards, which was first announced by Ola Electric in a letter to stock exchanges on 12 August, is significant as each company was liable to pay penalties for the missed timelines. Ola Electric’s balance sheet estimates for penalty provisions under the scheme were at ₹57 crore at the end of March 2026.
These extensions come at a time when the government has not disbursed any funds under the scheme. Under the PLI ACC scheme, cell makers were given a two-year gestation period, following which incentives would be given out for five more years as sales begin.
For Rajesh Exports, the hold on extension comes at a time when Sebi in a June 2026 interim order alleged misrepresentation worth ₹15 trillion by the company, and raised concerns about transactions of three of its firms—, ACC Energy Storage Private Ltd and Elest Private Ltd.
ACC Energy is a subsidiary of Rajesh Exports that qualified under the PLI scheme, and Elest is a privately held firm of Rajesh Exports’ owner Rajesh Mehta, which owns the land and technology on which the battery business is being built.
The MHI has also sent a show-cause notice to ACC Energy, the battery subsidiary of Rajesh Exports, which was awarded a contract to build battery capacity of 5GW.
“A show cause has been issued to ACC Energy. Until a satisfactory response from the company is received, their request has been kept on hold,” said a government official cited above, requesting anonymity.
In an earlier interview to Mint in June, Rajesh Mehta, chairperson at Rajesh Exports, had said that the company has not received any support from the government yet under the PLI scheme.
“If they give us, we’ll take it. If they don’t give, we are least bothered. By taking away the PLI, will they take away my invention?” Mehta told Mint in June.
Queries emailed to the spokespersons of Rajesh Exports, RIL, and Ola on 12 August remained unanswered till press time.
Abhishek Saxena, a former public policy expert at Niti Aayog, said where public money is involved in such large schemes, “the government holds discretionary powers to take decisions based on the evidence available to include or exclude firms from incentives or waivers in public interest”.
Experts say the administration of the scheme should be a lesson, especially for the 10GWh grid-scale storage tender floated on 15 July.
“Meeting deadlines of an incentive scheme is crucial, and we hope the lessons from the first ACC PLI scheme’s failure will be taken into consideration to modify the selection criteria for the recently floated tender for 10GWh grid-scale storage under the PLI ACC scheme,” said Reji Kumar Pillai, president of the India Smart Grid Forum, a power ministry-backed think tank.
“It is also important to understand that India presently does not produce localized battery-grade materials yet, which will be essential to build a domestic cell making ecosystem,” Pillai added.