Indian companies are increasingly exploring opportunities to set up battery cell
manufacturing operations to meet the demand for components of electric vehicles (EVs).
The Indian government is encouraging domestic lithium-ion cell manufacturing that is
conducted by NITI Aayog, India would have to manufacture Lithium-ion batteries
domestically to meet its EV targets without relying on imports. The government initiated the
National Mission on Transformative Mobility in 2019 to encourage phased manufacturing
programs for batteries and EV components. The initiative aims to aid in the setting up of an
intricate framework of state-of-the-art battery manufacturing units all across India. To support
cell manufacturing, the needs a sufficient supply of raw materials mainly, lithium, cobalt,
nickel, etc through mining grounds within the country or its peripheral countries. Over the
next decade, NITI Aayog proposes to set up mega factories that aggregate up to capacities
near 50GWh, with an estimated cost of USD 5 billion. This is expected to reduce India’s
dependency on foreign imports thus encouraging the supply of indigenously manufactured
batteries.
It said India can learn a lot from china which has aggressively expanded in the EV battery
space over the last 10 years, conquering each part of the supply chain to emerge as the
dominant player in e-mobility. China now leads in next-generation EVs through large
investments in R&D, favorable government policies, foreign direct investment inflows, and
aggressive acquisition of raw material resources across geographies. Taking lessons from
India’s neighbor in the north, improved access to raw materials can be provided in multiple
ways, including reduction of import duties on raw materials, improving bilateral ties with
countries rich in natural resources of the raw materials, and encouraging Indian companies
to acquire those resources.
“Comprehensive policies from the government that encompass the complete battery value
chain from acquisition of natural resources to recycling of batteries will go a long way in
providing a necessary push to the industry”, said the report titled E-mobility: Cell
manufacturing in India’. Steps such as tax subsidies and the development of special
economic lithium parks across countries to promote investments in raw material refining and
cell manufacturing capacities and continued PLI schemes and subsidies for cell
manufacturing will be key. EV cells are the most critical part of the e-mobility value chain, the
Indian EV industry suffers from overdependence on imports, limited local manufacturing,
finite access to raw materials, and refining capacities. “To accelerate India,s electric mobility
growth, the government and the industry ecosystem must collaborate, to nurture a
self–reliant, local EV value chain, with the established battery, manufacturers, OEMs, and
startups investing in continuous R&D partnerships and global alliances to create a strong
supply chain.
The increasing demand for electric vehicles and the rising shift towards clean energy
resources will drive the lithium-ion battery market’s growth in the coming year. An analysis
conducted by JMK Research and the Institute for Energy Economics and Financial Analysis
(IEEFA) estimated that the Indian lithium battery market would grow from 2.3 GWh in
FY2021 to 104 GWh in FY2030, with electric vehicles (EVs) accounting for 90 percent of the
total industry. The Indian government has set a 30 percent electric car sales target by 2030.
The Central Electricity Authority predicts that India will need 34 GW/136 GWh of battery
storage to add 450 GW of renewable resources. This will speed up the country’s move to
becoming a significant user of lithium batteries.
According to Mr. Vikrant, COO of EVI Technologies. The technology of lithium batteries
is constantly evolving. Until recently, the two dominant chemistries seen in the Indian market
were LFP (Lithium Ferro Phosphate) and NMC ( Nickel Manganese Cobalt). In Indian
contexts, LFP chemistry is considered safer, but NMC chemistry has a higher energy
density.
Solid-state batteries are intrinsically safer because they are non-flammable and much
research is being done in this field. In this decade, there will be further advances in lithium
battery technology, which can lead to higher adoption.
