Eager to avoid dependence on an external power like China, the South Asian nation is rapidly putting in place the pieces required to build a homegrown Li-ion cell and battery industry.
17 Oct 2024 | 7418 Views | By Kiran Murali
As the world pivots towards sustainable energy solutions, India stands at a crucial crossroads. With ambitious goals to slash carbon emissions and a burgeoning electric vehicle (EV) market, the country faces a critical challenge: establishing a robust, domestic lithium-ion battery manufacturing ecosystem.
Currently, India's EV dreams are powered largely ...
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As the world pivots towards sustainable energy solutions, India stands at a crucial crossroads. With ambitious goals to slash carbon emissions and a burgeoning electric vehicle (EV) market, the country faces a critical challenge: establishing a robust, domestic lithium-ion battery manufacturing ecosystem.
Currently, India's EV dreams are powered largely by imported batteries from China, Japan, and South Korea. However, this dependence on foreign technology and supply chains is set to change dramatically. Driven by government initiatives and substantial private sector investments, India is poised to become a major player in the global lithium-ion battery market.
This shift isn't just about industrial policy—it's a transformation that could reshape India's economy, energy security, and environmental future. India's evolving lithium-ion battery sector faces its own challenges and opportunities.
The Importance of Localisation
Electric vehicles have been identified as a key enabler for India’s low-carbon future. In this context, localisation of cell manufacturing is something that is being looked at keenly as made-in-India lithium-ion batteries hold immense potential to drive the adoption of electric vehicles in the country, besides making the country less import-dependent.
The demand for lithium-ion batteries from electric vehicles and storage applications in India is estimated at 102 GWh by the end of this decade and will expand further to 244 GWh by 2035, according to Bloomberg New Energy Finance (BNEF). Over three-quarters of that demand is seen from electric vehicles. However, battery cell manufacturing in India is yet to take off.
New Beginnings
Several companies are racing to set up battery manufacturing plants under various advanced chemistries, thanks partly to strong encouragement from the government. As such, it is expected that India’s battery manufacturing capacity will reach 110-1500 GWh by 2030.
Recognising the growing demand for Li-ion batteries, traditional lead acid battery manufacturers Exide Energy and Amara Raja are setting up gigafactories here for Li-ion battery manufacturing. Besides, several new entrants such as Ola Electric, Reliance Industries, JSW Group and GODI India are also establishing their facilities for large-scale Li-ion battery manufacturing.
Most of the battery makers in India lack expertise in the technology for manufacturing Li-ion batteries. Hence, many have roped in foreign technology partners, or are in the process, to help them manufacture the batteries here. These partnerships also help bring in a global supply chain for critical battery materials, as well as customer support for deploying these solutions.
For instance, Amara Raja has partnered with Gotion-InoBat-Batteries to license Gotion’s LFP technology for manufacturing lithium-ion cells, while Exide has tied up with China-based SVOLT Energy Technology. Similarly, Reliance Industries and JSW Group are also scouting for technology partners.
“There is no natural transition for a lead acid battery manufacturer to a Li-ion manufacturer,” pointed out Vijayanand Samudrala, President - New Energy at Amara Raja Energy & Mobility, adding that the electro-chemical technology underlying both are very different.
Gayatri Dadheech, chief technology officer at Exide Industries, also agrees: “Having got technology licensing agreement with their products and their technical know-how really helps us leapfrog this technology and bring the product into the market as soon as possible…In this process, we are also acquiring some raw materials from them as well as the skill set required. This helps us to learn the business from the person who is an expert in the business,”
Varying Demands
One of the requirements of the Indian EV ecosystem is the wide variety of batteries that are required to support the wide variety of vehicles in use. Models ranging from compact, fuel-efficient two- and three-wheelers to larger cars and heavy-duty trucks jostle for space on Indian roads, and this necessitates the need for a variety of battery solutions with different chemistries. This is especially so if you are an independent battery maker supplying to a variety of OEMs, unlike captive units of automakers.
“We can’t have a very consolidated homogeneous kind of solution that would power these vehicles. Hence, we need to have a variety of product portfolios, both at the cell level as well as at the pack level,” said Samudrala.
Over the last couple of years, the battery industry has seen a significant shift in Li-ion cell chemistries, with a growing preference for Lithium Iron Phosphate (LFP) chemistry over Nickel Manganese Cobalt (NMC).
LFP batteries are gaining greater acceptability considering their improved thermal stability, longer life cycles and lower costs compared with the standard lithium-ion cells that use nickel, manganese and cobalt.
Samudrala believes LFP chemistry will start dominating the market going forward as more and more electric mobility comes onto roads with cars and light commercial vehicles that require bigger battery packs.
However, NMC batteries are known for their higher energy density – the ability to store more energy in a relatively small space. This makes it ideal for two-wheeler applications, where space is limited.
“If you look at passenger kilometers that are locked in in India, 70% are done on light electric vehicles [two and three-wheelers]. With last-mile mobility becoming more important these days, these light electric vehicles are becoming more prominent. So any battery solution that we are trying to provide has to keep in mind a light electric vehicle portfolio,” he noted.
Apart from LFP and NMC chemistries, various other technologies such as Lithium Manganese Iron Phosphate (LMFP), Lithium Cobalt Oxide (LCO) and Lithium Cobalt Aluminum Oxide (LCA), as well as solid-state batteries are also being explored and developed for various applications.
Sanjay Wadhwa, chairman and managing director of battery maker Nash Industries, expects the battery industry to be in a dynamic state, and sees a need for battery makers to adapt and be flexible in accommodating different chemistries and technologies.
“We have to find ways to create a platform that accommodates different technologies. I think they would constantly evolve; the situation is highly volatile at this point and many things are changing as far as chemistries are concerned. And there is no one dominant chemistry that can say that it is going to be there forever,” he said.
Access to Raw Materials
The biggest challenge for Li-ion battery manufacturers in India is the availability of raw materials. Lithium, cobalt, nickel, and graphite are essential components of lithium batteries, and India lacks significant reserves of these minerals. This forces battery makers to depend on imported raw materials.
India's lithium-ion battery industry heavily depends on imports, with China and Hong Kong being the primary suppliers. Currently, a significant part of Li-ion mineral production for cells is happening in China, thanks to the local government’s support in the form of cheap land, energy, trained labor, and less stringent environmental regulations.
While there have been discoveries of lithium deposits in Jharkhand, Rajasthan, and Jammu & Kashmir, India's efforts for domestic lithium mining and commercialization for battery production remains in a state of infancy.
As such, heavy dependence on Chinese imports has the potential to create a supply chain bottleneck for the battery manufacturing industry in case of any geopolitical tension between the two countries.
“It is very important to develop these ecosystems as the electric vehicle adoption rates go up, and create these supply chain capabilities in the entire battery value chain. We focus a lot on setting up gigafactories for cells, but it is important to build the midstream and upstream supply chains,” Amara Raja’s Samudrala said.
Vikram Handa, founder and managing director of battery material manufacturer Epsilon Group, believes India needs to learn a lot from what China has done in building the massive processing industry.
“They don’t necessarily have all the critical minerals, and they are buying from countries like Australia, Africa, Canada, South America and Indonesia. But, 99% of anodes are made in China. Similarly, the cathode capacity is huge in China. Hence, they enjoy a cost and scale advantage,” he said.
For now, companies are waiting eagerly to find out how the government can support them in creating the raw material supply chain.