NITI Aayog proposes EV Battery Manufacturing Incentives

The government's think tank, NITI Aayog, has offered incentives to encourage the processing and refinement of minerals used in lithium-ion batteries, including production-linked incentive (PLI) programmes, tax breaks, and royalties.

"Policy should put a strong emphasis on expanding LIB recycling facilities with production-linked incentives to support vital mineral mining and extraction initiatives. This will help to promote reuse, disposal, and ecologically friendly waste management practices, according to a study by NITI Aayog.

The policy planning commission also recommended supporting lab-to-market commercialization of products in its report, "Mine to market: critical minerals supply chain for domestic value addition in lithium-ion battery manufacturing." It also recommended encouraging R&D for earth-abundant alternatives to critical minerals used in ACC (Advanced Carbon Composite) batteries.

It has also advised creating hubs for the industrialization of technologies and demonstration projects, as well as startup incubators.

By 2030, the paper estimates that India's advanced chemistry cell manufacturing sector would require about 193,000 tonnes per year of cathode active material to create 100 GWh of batteries.

According to cathode chemistry and supply chain expenses for mining and refining crucial minerals, "Critical minerals and their active elements used in the manufacturing of lithium-ion batteries (LIB) make up approximately 33%-48% of the total LIB pack cost," it was said further.

According to NITI Aayog, the production of lithium-ion battery (LIB) packs may add almost 12% more domestic value just from the production of Li-NMC and LFP active materials from essential mineral precursors. 

This occurs at a time when India is placing a significant wager on

EVs

Li-ion batteries are accelerating the switch to EVs worldwide, especially in India. The market for Li-ion batteries in India is expected to increase from 4 GWh in 2022 to 120 GWh in 2030.

Due to the uneven concentration of lithium sources around the world, India is still reliant on importing Li-ion batteries. It was wonderful news for India when the Geological Survey of India previously identified significant lithium resources in the Reasi area of Jammu. Nevertheless, bringing the mine up to commercial production levels might take 7-8 years.

In her budget plans, Finance Minister Nirmala Sitharaman stated that imports of machinery and capital items used to make li-ion cells for EV batteries would not be subject to customs duties.

Only a few firms, such as Log 9 Materials and ION Energy, have been developing lithium-ion substitute technology as of late.