India's Need For Cell Manufacturing Infrastructure & Necessity for Downstream Supply Chain

India has made great strides in electric transportation with the introduction of the Reva electric vehicle in 2001. With numerous new electric two-wheeler (2W) OEMs entering the industry and multiple existing passenger vehicle manufacturers like

Tata Motors

Some of the primary drivers of this rise are cheaper ownership costs compared to Internal combustion engines (ICEs), rising costs of fuels for ICE cars, falling battery prices, development of charging stations, and lower cost of maintenance. The government has set aggressive goals for EV acceptance throughout all vehicle segments to reduce its global carbon footprint targets. It also promotes Electric Vehicles through supportive programs like the Faster Adoption and Manufacturing of Hybrid and

Electric Vehicles

However, in a worldwide context, India's present e-mobility situation is not very encouraging. Contrary to several international markets, the nation is significantly lagging in adopting electric vehicles. The greatest obstacle to India's EV goal is the country's massive reliance on imports of Li-ion batteries. Since batteries account for about 40% of the price of an EV, Indian OEMs and, eventually, consumers have to pay higher rates due to the highly restricted indigenous supply of Li-ion cells. This makes the whole EV business susceptible to interruptions in the world's supply chains.

The Need for Cell Manufacturing in India

Indian businesses are rapidly looking at ways to establish battery cell manufacturing facilities to satisfy the growing electric vehicle components (EVs) market. India has to produce its lithium-ion batteries to reach its EV objectives without depending on imported components. Hence the Indian government is supporting local lithium-ion cell production, which NITI Aayog manages. The government established the National Mission on Transformative Mobility in 2019 to support initiatives that gradually manufacture batteries and EV parts. The project intends to support the establishment of a complex network of cutting-edge battery production facilities across India.

According to the report, China, which has rapidly developed in the EV battery market over the past 10 years, capturing every link in the distribution chain to become the industry's leading player in e-mobility, can teach India a lot. Because of its significant R&D expenditures, supportive regulations, FDI intakes, and proactive takeover of raw material assets globally, China is now the market leader for next-generation EVs. Taking cues from India's northern neighbor, enhanced availability of raw materials can be achieved in a variety of ways, such as by lowering import taxes on these materials, strengthening bilateral relationships with nations that are rich within these natural resources, and inspiring Indian businesses to secure those resources.

Position of India in Cell Manufacturing

According to predictions, India's Li-ion battery consumption will increase from 3 GWh to 20 GWh by 2026 and 70 GWh by 2030. According to the Ministry of Mines, India now buys about 70% of its Li-ion battery needs from China and Hong Kong. Excessive reliance on imports hinders the development of India's electric vehicle (EV) sector since cells represent the most critical component of the e-mobility value chain. This reliance on imports is caused by several elements, including limited local production capability, restricted availability of raw materials, and insufficient refining capacity.

Li-ion TDS battery Gujarat is home to India's first significant Li-ion battery production site. With a current partnership with SVOLT Energy Technology in China to produce Li-ion batteries, Exide Industries intends to invest US $770 million in a brand-new cell production plant with a 12 GWh capability. Furthermore, Amara Raja created the nation's first technological center at its Tirupati site in Andhra Pradesh to produce Li-ion batteries.

In the Li-ion market, technology-driven startups are also getting ready. For instance, Log9 Materials, a player in graphene nanotechnology, has created sophisticated energy storage methods and claims that a 2W electric motor can be fully charged in 15 minutes and that batteries can last for 15 years. The electric mobility startup Cell Propulsion is also creating a joint venture with homegrown e-motors for commercial EVs.

Additionally, top manufacturers are improving their internal battery capacities. For instance, Lucas TVS and US-based 24M Technologies, a Li-ion battery technology business, struck a deal to build a gigafactory in Chennai to manufacture cells utilizing 24M's proprietary technology. Ola Electric acquired an essential stake in StoreDot, an Israeli battery technology startup leading the way in exceptional fast-charging technologies, and financed a 50 GWh battery production facility.

The government is also contributing by giving the concentration of cell manufacture the necessary impetus. In addition to the FAME II initiatives for the overall expansion of the EV market and promotion of the ecology, the government has undertaken targeted initiatives to improve domestic battery supply, reduce the price of storing energy, and replace $3 billion in annual importation. Greenfield battery production plants can receive subsidies of Rs. 18,000 crores via the PLI program for Advanced Chemistry Cell (ACC).

Ola Electric

Investments targets for the Future

As per ICRA, expenditures in cell production are anticipated to approach $9 billion by 2030, given the increased requirement from diverse sectors and future development possibilities forecast beyond 2030. ICRA's forecast is centered on the saturation of EVs across automobile categories, their rapid expansion over the following ten years, and the battery's continued status as the most critical and expensive part of an EV.

According to ICRA, lithium-ion batteries have become the preferred battery for EVs because of their outstanding performance, good thermal properties, and negligible self-discharge. One of the most common cathode chemistry at the moment is lithium nickel manganese oxide (NMC); however, due to its superior thermal properties and more affordable manufacture, lithium iron phosphate (LFP) chemistry is predicted to become more prevalent in the Future. Even though it could take some time for these chemistries to be commercially viable, several more are still being developed.

High Grounds for India

Giga factories' ability to produce Li-ion batteries depends on a lengthy and intricate distribution chain for the necessary raw ingredients. This report presents production data of critical natural resources for the world and India. An effort must be conducted to manufacture high-value battery parts that local and foreign cell production businesses can utilize from the ores by which India has existing deposits. Copper foil electric collectors and aluminum foil electric collectors make up these essential elements. The global production sector may be pursued in India if such high-value parts are made there, significantly increasing exports.

In the case of graphite, it is essential to assess the amount of large flake graphite, which is employed effectively as an anode source, in the current deposits. The usage of artificial graphite made from coke as an alternate anode source is growing. Even if local resources are insufficient, improving existing facilities for ore refining and high-value Li-ion battery production is still possible. In anode materials, silicon is now used more frequently as an addition. Manufacturing of cells may profit from local silicon supply.

Making cooperative agreements for obtaining ores or concentrations from foreign nations should be done in the case of all various raw materials (Co, Li) for which India has no current resources. From a dependability and purity standpoint, localized manufacturing of lithium concentrations is advantageous to the battery sector. Pure lithium raw materials like Li2CO3 and LiOH are essential to achieve a long cycle life. It is important to realize that holding assets is just one link in the supply chain. After the extraction of ores, several different processes may be carried out locally, even without resources. These processes include the extraction of ore, refining, purification, and synthesizing functional anode and cathode materials.

Drawbacks…

There is an additional concern due to the future production upscales, which is the growing battery waste. Rather than being viewed as a barrier, this presents a huge opportunity. In the upcoming years, the worldwide Li-ion recycling market will experience a tremendous expansion. If Indian businesses increase their efforts in this area, it may set an example for the rest of the globe while creating a market that could hire many people. Lead acid batteries provide a real-world illustration of a comprehensive recycling system, with 96 percent of batteries being recovered.

The way we get the energy we need is completely changing worldwide, and the nations spearheading this change will inevitably reap the rewards. India has a considerable promise of producing renewable energy because it is a tropical nation. It's up to us to acknowledge this and start making the required storage technology advancements so we can use this resource. So when will India eventually leap?