Localised cell manufacturing would contribute to job creation and help India achieve greater self-reliance in EV production, Shailesh Chandra said.
27 Jan 2025 | 3238 Views | By Kiran Murali and Ketan Thakkar
Despite a steep drop in battery prices globally, Tata Passenger Electric Mobility MD, Shailesh Chandra, advocates for local cell manufacturing to address supply chain risks.
Speaking to the media at the Bharat Mobility Global Expo 2025, earlier this month, Chandra emphasized the importance of localizing cell manufacturing in India ...
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Despite a steep drop in battery prices globally, Tata Passenger Electric Mobility MD, Shailesh Chandra, advocates for local cell manufacturing to address supply chain risks.
Speaking to the media at the Bharat Mobility Global Expo 2025, earlier this month, Chandra emphasized the importance of localizing cell manufacturing in India to address supply chain risks, geopolitical challenges, and long-term sustainability for the electric vehicle (EV) industry.
“As a nation, you will always take counter actions to ensure value addition happens domestically. The government may impose duties at some stage, so it would be short-sighted not to localize,” he added.
Currently, India's EV dreams are powered largely by imported batteries from China, Japan, and South Korea. Battery costs account for over 40% of the electric vehicle price. Goldman Sachs last year said global average battery prices declined from $153 per kWh in 2022 to $149 in 2023, and were projected to fall to $111 in 2024. By 2026, the research said prices could likely decline further towards $80 per kWh.
Localisation of cell manufacturing is something that is being looked at keenly as made-in-India Li-ion batteries hold immense potential to drive the adoption of EVs, besides making the country less import-dependent.
Traditional lead acid battery manufacturers Exide Energy and Amara Raja are setting up gigafactories here for Li-ion battery manufacturing. 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.
With an investment of Rs 13,000 crore, Tata Group is also setting up a Li-ion battery manufacturing plant in Sanand, Gujarat, and its subsidiary Agratas Energy Storage Solutions has signed a MoU with the Gujarat government for this.
The facility is expected to have an initial capacity of 20 Gwh and is likely to start operations in the next couple of years. With the likely access to locally manufactured batteries in the future, Tata Motors could strengthen its EV ecosystem with better control over the battery supply chain.
Chandra pointed out that localised cell manufacturing would contribute to job creation and help India achieve greater self-reliance in EV production.
Regarding the strategic benefits of local manufacturing, Chandra highlighted the need to reduce reliance on imports while creating value within India’s economy.
“There are certain factors in India, like lower power and labor costs, that could make cell manufacturing competitive over time, especially with scale,” Chandra noted.
He acknowledged that while costs may initially be slightly higher, localizing cell production offers insulation from forex fluctuations and global supply chain disruptions, making it a worthwhile long-term investment.
He emphasized that the strategy is particularly viable for higher-segment cars, which can absorb the cost of larger battery packs due to supportive tax structures and higher price points.
“For premium cars, achieving price parity is easier because the cost of the battery pack aligns well with the overall pricing of the vehicle,” he explained.
However, he noted the challenges for lower-segment vehicles, where battery costs form a larger proportion of the vehicle's price. “The battery pack size doesn’t change significantly across segments—whether it’s a hatchback, CUV, or mid-size SUV.
“A 45-kWh pack is necessary to ensure customer confidence. Achieving price parity in the lower segment is more challenging, but it will happen over time through efficiency improvements and scale,” Chandra said.
Chandra advocated for a long-term approach to building a robust local supply chain, including cell manufacturing, to support India's growing EV industry.