Balancing Domestic Lithium Resources with Alternative Battery Technologies: India's Strategic Approach to Meeting Growing EV Demand While Reducing Import Dependency
28 Feb 2025 | 2376 Views | By Pratik Kamdar, Neuron Energy
The rise of electric vehicles (EVs) signifies a global shift toward decarbonisation and renewable energy adoption. In India, this shift is especially pertinent as the country accelerates efforts to achieve 50% of its energy needs from renewable sources by 2030.
Lithium-ion (Li-ion) batteries, the cornerstone of EV energy storage, ...
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The rise of electric vehicles (EVs) signifies a global shift toward decarbonisation and renewable energy adoption. In India, this shift is especially pertinent as the country accelerates efforts to achieve 50% of its energy needs from renewable sources by 2030.
Lithium-ion (Li-ion) batteries, the cornerstone of EV energy storage, are central to this transition due to their superior energy density, performance, durability, and environmental credentials. However, the reliance on imported lithium and the need to explore alternative chemistries to make EVs more accessible are significant challenges India must address.
India’s Lithium-Ion Battery Market: A Snapshot
The Indian lithium-ion battery market was valued at USD 2.8 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 12.9% from 2024 to 2032, projected to reach approximately USD 8.7 billion by 20321. This rapid growth is being driven by the rising adoption of electric vehicles and the decarbonisation of India’s energy grid.
Currently, nearly all of India’s 15 GWh demand for lithium-ion batteries is met through imports. However, this demand is expected to surge to 54 GWh by FY27 and 127 GWh by FY30, creating a substantial gap that needs to be filled through domestic production.
This dramatic rise in demand is driven not only by the growing popularity of EVs but also by the government’s push toward renewable energy solutions. To reduce its dependence on imports, India aims to decrease its lithium-ion battery import reliance to just 20% by FY27, while increasing domestic production capacity.
Why Lithium-Ion Batteries Dominate EVs
EVs benefit greatly from lithium-ion batteries because of their outstanding properties. Their high energy density of 300–500 Wh/kg approximately ten times that of lead-acid batteries, enables lightweight and compact designs critical for efficient EV performance. These batteries maintain reliability across extreme temperatures and exhibit a low self-discharge rate, ensuring energy retention during inactivity.
In addition to performance, Li-ion batteries excel in durability, enduring numerous charge cycles while retaining most of their original capacity. This longevity minimises replacement costs. As an environmentally friendly option, they produce minimal emissions and are recyclable, supporting global sustainability efforts. These advantages make lithium-ion batteries indispensable for advancing eco-friendly mobility and achieving widespread EV adoption.
The Case for Local Sourcing of Lithium
India’s reliance on imported lithium-ion batteries poses a challenge to the long-term sustainability and economic viability of the EV ecosystem. Sourcing lithium locally is a crucial step in addressing these challenges. India’s push to develop domestic lithium supply chains is not only essential for ensuring a steady supply of raw materials but also for reducing costs and increasing the resilience of its EV market.
India has made significant strides in identifying domestic sources of lithium, with reserves found in areas such as the Salal-Haimana region in Jammu and Kashmir and the Mandya district in Karnataka2. By developing local mining operations and refining capabilities, India can reduce its dependency on international suppliers, such as China and Australia, thereby mitigating the risks associated with geopolitical tensions and supply chain disruptions.
In addition to securing a stable supply of lithium, local sourcing can also provide economic benefits, including the creation of jobs, the development of a skilled workforce, and the stimulation of technological innovation. Furthermore, the environmental footprint of transporting raw lithium across long distances can be reduced, making local sourcing a more sustainable option for the future.
The Potential of Alternative Chemistries
While Li-ion batteries dominate, exploring alternative chemistries can enhance accessibility and sustainability in the EV market:
1. Sodium-Ion Batteries
With sodium being more abundant and cheaper than lithium, sodium-ion batteries are gaining attention as a viable alternative, especially for stationary energy storage and budget EVs.
2. Solid-State Batteries
Although still in developmental stages, solid-state batteries promise higher energy densities, faster charging times, and enhanced safety, potentially revolutionising EV technology.
3. Lithium-sulfur (Li-S) Batteries
Lithium-sulfur batteries offer a higher theoretical energy density compared to Li-ion batteries, allowing them to store more energy for the same weight. Additionally, they are more cost-effective to manufacture, as sulfur is abundant and less toxic than many other materials used in batteries.
Balancing Local Sourcing with Technological Diversification
Local lithium sourcing and the exploration of diverse battery chemistries are complementary strategies. While lithium remains the backbone of current EV technology, investing in alternative chemistries ensures adaptability to evolving demands and mitigates risks associated with material shortages or geopolitical tensions. India must also focus on developing a circular economy for batteries, emphasising recycling to recover lithium and other valuable materials. This reduces the environmental footprint of battery production and strengthens resource availability.
Conclusion
Lithium plays a pivotal role in advancing EV adoption and supporting India’s renewable energy goals. Local sourcing of lithium is a strategic priority that can bolster economic viability, reduce reliance on imports, and secure energy independence. Simultaneously, embracing alternative battery chemistries can broaden accessibility and sustainability in the EV market.
As India’s demand for lithium-ion batteries skyrockets, balancing local resource development with innovation in battery technology will be crucial. By doing so, India can not only accelerate its EV transition but also establish itself as a global leader in sustainable energy solutions.