Gandhinagar: In what will provide a major boost to domestic electric vehicle (EV) production, the Tata Group is planning to establish a lithium-ion battery plant in the Dholera Special Investment Region (DSIR), Gujarat, with an investment of Rs 4,000 crore, reports The Times of India.

“Tata Group has already made an announcement to set up a lithium-ion battery manufacturing unit. They have procured land of 126 acres and in the first phase, the company will make an investment of Rs 1,000 crore,” remarked managing director, Dholera Industrial City Development Limited (DICDL), Jaiprakash Shivhare.

He revealed that the plant’s manufacturing capacity will be 10 giga watts in the starting, but that the Centre will soon come out with a policy to provide incentives for lithium-ion battery plants with capacity till 50 giga watts.

In the Union budget 2019-20, the Centre has also moved EVs from the 12 per cent slab to the five per cent slab, and it has also rolled out a tax incentive in the form of a deduction of up to Rs 2.5 lakh on interest paid on loans to purchase EVs.

As the biggest cost contributor to the price of an EV is the lithium-ion battery, its domestic production will have a large impact on reducing the overall price for a vehicle, which in turn would greatly help in encouraging EV adoption in a price-sensitive market like India.