India is planning to invite bids for a US$960 million incentive programme for the production of electric vehicle batteries, according to people familiar with the matter.

The programme will require winning bidders to set up advanced chemistry battery plants with a total output of 20 gigawatt hour, said the people, declining to be named as the plans are private. The government will seek bids from potential investors next month, they said.

Companies including Korea’s LG Energy Solution, and local heavyweights such as Mahindra & Mahindra, Amara Raja Energy & Mobility, Exide Industries and Larsen & Toubro showed interest during a consultation meeting held with government officials, the people said. The government will give incentives to companies over a period of five years on the sale of batteries manufactured locally. 

Representatives for Mahindra, Amara Raja, Exide, LG, Larsen & Toubro and the Ministry of Heavy Industries didn’t respond to requests for comment.

Billionaire Mukesh Ambani’s Reliance Industries, Ola Electric Mobility and Rajesh Exports were selected last year to produce 30 gigawatt hour worth of battery capacity and avail incentives under the first phase of this government programme.

The demand for batteries is expected to rise to 260 gigawatt hour by 2030, catering to a growing market of electric vehicles, grid-scale energy storage and consumer electronics, according to a report published by research centre RMI India and the government’s think tank Niti Aayog. 

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The battery push comes as India is looking to increase adoption of less polluting transport. Prime Minister Narendra Modi’s administration is considering reducing import taxes for battery-powered models to woo Tesla, the Financial Times reported on Monday. The government is also seeking to boost local EV production with a US$3.1 billion incentive programme launched in 2021.

A representative of the Ministry of Heavy Industries did not respond to a request for comment. BLOOMBERG