Amara Raja Energy & Mobility shares saw a spike on the back of news that India is making a significant push in the electric vehicle (EV) sector with an ambitious ₹8,000 crore ($960 million) incentive scheme to boost battery production for EVs. This initiative, as reported by Bloomberg, aims to strengthen India’s stance in the global EV market.

What Happened? The upcoming month marks a critical phase for India’s EV industry, as the bidding process to set up advanced battery plants kicks off. Companies like South Korea’s LG Energy Solution Ltd., and Indian giants Mahindra & Mahindra Ltd., Amara Raja Energy & Mobility Ltd., Exide Industries Ltd., and Larsen & Toubro Ltd., have shown a strong interest in this project. They’ll be tasked with creating battery plants capable of producing a total of 20 gigawatt-hours.

These incentives, spread over five years, hinge on the sales of locally-made batteries. This plan is in line with the government’s push for self-reliance and sustainability in the EV domain. Last year, big names like Reliance Industries Ltd., Ola Electric Mobility Pvt., and Rajesh Exports Ltd. were part of a similar initiative, producing 30 gigawatt-hours of battery capacity with initial incentives.

See also: Byju’s Gets ₹9,000 Cr Notice From ED For Foreign Exchange Violations

Why it matters? Given the expected surge in demand, estimated at 260 gigawatt-hours by 2030 for EVs, grid storage, and consumer electronics, this move is timely. It’s part of India’s larger objective to promote cleaner transport.

In line with this, Prime Minister Narendra Modi‘s government is considering cutting import taxes on battery-powered vehicles to attract major players like Tesla. Furthermore, the government is already supporting local EV production with a $3.1 billion incentive program launched in 2021.

Price Action: Amara Raja Energy & Mobility Ltd. shares were up 2.03% to ₹654.15 on Wednesday afternoon.

Read next: Vijay Kedia-Backed Micro Cap Stock Surges 35% In 2 Days After Bagging ₹580 Cr Orders