Lohum – a battery lifecycle solutions firm aims to make India self-sufficient in terms of energy. The company basically operates around three prime products and services namely First-life battery, second-life battery and end-of-life material extraction. Now, in order to understand what that means, the first life battery is basically creating batteries from new lithium-ion cells and putting them out in various applications. On the other hand, second life battery means taking back battery packs from the market and harvesting the good cells from them, understanding the life of those cells and the state of health of the cell and putting them back for another application like a mobility application such as an e-rickshaw or two-wheeler or it could be a storage application like an inverter battery.
Last is the material extraction, where the company extracts various materials that go into a cell such as lithium, cobalt, graphite, nickel, manganese, etc. These materials are very geostrategic in nature and since in India, in particular, we don’t have lithium, cobalt and nickel, so extracting these elements is a step towards making India energy independent, the company believes. In order to understand the company’s services better and its future plans, Express Drives recently had an insightful conversation with Rajat Verma, Founder, Lohum. Here is what he has to say!
Express Drives – First, how is the lockdown going for you as a brand?
Rajat – June was a little bit of a start and stop but July/August have mostly been steady. We have largely been able to maintain our production runs on most of the days. Almost the entire team is back. We’re seeing demand emerge again, particularly from the logistics sector. So, I do believe the journey towards normalisation has begun and we can all focus back on the core of the business. But, we remain very cautious, particularly when it concerns the safety of our team and we are taking every possible precaution.
What exactly has been the impact on the business amid the Covid-19 situation?
I can look at the impact from two sides. One is the supply side impact and the other, of course, is the demand side. Now, we make batteries for both automobile and non-automobile sectors. Lithium-ion batteries are used across the board. The automobile sector as you can understand had been, at least till June, significantly impacted. Recent data seems to suggest that a bunch of categories within the automobile sector have picked up again so that impact is slowly receding. The silver lining is the logistics segment has picked up on the back of e-commerce companies. Further, we’ve been able to find an alternative on the storage side. Data centers, a lot of which are using lithium-ion batteries as backup solutions have seen a surge in demand, more so during lockdown. Solar based solutions which require backup continue to grow.
On the supply side as you can understand, all of us are somewhat dependent on China. Now, obviously, the Chinese supply chain got impacted a lot not just because of Covid-19 but also because of the recent incidents in Ladakh. So, all that played a role. But that has resulted in a lot more focus on finding alternatives. While people know we can not fix the supply chain issue overnight, everyone is becoming more and more creative, including us. We also had a non-Chinese advantage that we have a fair bit of business in terms of the second life and material extraction side that is highly dependent on the supply chain in India and has nothing to do with supply chains outside of India. That remains our strength even while we as a country figure out what we want to do with China.
During the second life of the battery, how much difference is there in the efficiency?
This varies. We get second life cells which are as great as first life cells. We get second life cells that have 70% of the capacity of the first life cells. We get a range of different behaviour across cells and that range tells us what kind of application we can put it out there. The application will itself determine what kind of load or burden will be on the cell and that will help us understand that. So, if I’m getting 7,000 cells back, I can put 20% into one application and 20 percent into another application, so on and so forth. We have a very proprietary process that is based on our own heuristics.. That is the core strength of the organisation. That is something where we have done extensive R&D and we’re happy to that say that we have one of the most extensive database of cells across the world in terms of how many cells we have studied and how many we have analysed and how many we have put back into second life. Moreover, we have crossed more than 1 million miles in vehicle application with second life cells which is something that no one in the world has done.
Speaking of the cost, what might be the figure while undergoing the second life battery process? Suppose I have a battery from an Ather scooter worth Rs 50,000 and I give the battery pack to you, what will be the average cost you will incur to give the battery a second life?
When it comes to an application, the end-user does not care whether you’re giving them a second life battery or a third life battery or first life battery. They have a certain requirement from that battery. So say, I have an Ather scooter and I need 80 km of range from one single charge, that is a requirement. When we put together a battery pack whether with new cells or old cells, that is the range we try to give.
In the market if the price is X, we will typically market ourselves at 80% of X, sometimes even 75% of X. If I look at three-wheeler batteries, our batteries are almost Rs 20,000 cheaper than where the market is. That is where we have a huge advantage. Having said that, there is no deterioration in performance or warranty of what we offer to the market. It is the same quality we offer. If there is a deterioration, then we put it into another application which does not require that kind of performance. E.g. all my cells have deteriorated down to 60% and I can’t put those cells into a two-wheeler battery. I’ll take those cells and create a battery pack for an inverter application and that will provide an alternative to a lead-acid battery. Lead-acid batteries require maintenance, deteriorate quickly and take a lot of space. We instead provide a li-ion battery pack. Custom built to what the application requires, we fulfil that with our second life cells with the constraints provided by the application and if we cannot, we put it into an alternative application where the constraints can be met.
End of the day, if you give me a battery pack, I can either put it back into the original application or I will repurpose it into some other application. In the world of recycling we have a certain way of thinking about the world where we either repair, refurbish or repurpose or recycle. Repair means I don’t have to do anything much and just make minor tweaks. Refurbish means I’m creating another product for a similar application, but with modified parameters. If the first product had 3 years warranty, I’m giving the new product a 2-year warranty. If the original product gave 80 km, I’m giving it 70 Km. Repurpose means I can no longer put it into the original application. I need to create another application. Recycle means I don’t have any other further application left which means I need to extract the raw materials and sell that raw material back into the market to create new applications. That is the Paradigm we tend to follow in the recycling world.
You must have plans on tying up with multiple OEMs. Can you shed some light on that and if you have any current partnerships?
We have already tied up with a bunch of OEMs, particularly in the two and three-wheeler segments. Most of the names in the electric vehicle space are either working with us or are in talks and getting our products approved. On the recycling side, I can’t name the players as the information is confidential but we work with three large global OEMs to whom we provide a complete second life and recycling solution.
What is full-stack lithium-ion battery recycling and how does it work?
Full-stack means you are able to extract all the material from a lithium-ion cell. A cell as I mentioned is basically comprised of lithium, cobalt, graphite, nickel and manganese and a few other elements. The reason I mentioned these particular elements is because these have all been identified even by the govt of India as strategic elements and we have challenges with these in the country. By recycling, we’re actually helping India create a sort of independence with respect to these materials.
Remember, one of the reasons why we are moving to battery-based vehicles is because we want to reduce our dependency on oil. But if we don’t address the material challenge, we will be back to square one as we will still incur a large foreign import bill. By recycling, we’re trying to reduce that foreign import bill and that is the basic concept we’re trying to introduce to everyone whether it is to the market, the government or other stakeholders. Today India is one of the largest automotive nations in the world and we are trying to become energy independent. We should aim to become a recycling hub of the world because only when we do that are we becoming truly energy independent. India has all the right characteristics that can make her a very efficient recycling hub sustainably and, in the process, become energy independent.
As Lohum manufactures batteries, how do you see PM Modi’s Atmanirbhar emotion and how do you think it will impact your business?
When we are talking about creating in the nation where we need to become independent of others and need to become absolutely dependent on ourselves, that’s a great first step and allows everyone to think creatively but within the constraints. Next step is how we realistically and materially do it? None of us can deny that China today has huge capacity advantage over not just India but any nation in the world. To break that is not going to be an easy thing and to break the advantage china holds over everyone will take time but several baby steps can be taken. Baby steps in the li-ion battery segment is we start doing more and more battery pack assembly in the nation. The next step is cell manufacturing in the nation and the step after that is to do electronics manufacturing in the nation. Today we are already doing battery pack assembly in the country. Lohum as an organisation is harvesting these cells, which is akin to producing our own cells.
More and more companies such as tata chemicals and TVS are talking about creating cell manufacturing capacity in the country. The last is becoming independent in electronics. Today we already do a lot of design work in electronics and hopefully in time, we will start doing a lot more fabrication work in electronic components. Those are the steps essentially involved in getting there. For India to compete with China, whether it is for manufacturing or raw materials, we need to become a great recycling hub for end to end products. Recycling end products is how you become a secondary producer of raw material. Without raw material you can have all the great plans but can not produce anything. China has captured raw materials over the world and now we need to capture it back, essentially by becoming a sustainable recycling nation.
Are your solutions open to people having personal mobility solutions as well? Suppose I have an electric scooter for 5 years and I want to know whether it can be recycled or refurbished, so is that option also open or is it just for OEMs as of now?
Of course, you can come to us though we are a very young company and are increasing our distribution and presence. We are open to taking mobile phone battery packs to laptop packs and larger vehicle battery packs so that we can subject them to our second life and material extraction process and thus provision to the broader ecosystem. I would like to remind again, we have a lot of raw material in the country and we want to figure out how to recycle every product in the country. E.g. there is enough raw material in the country to produce potentially 1+ million two-wheelers every year. That is the amount we have in the country. You don’t need to go out but you need to become better at recycling.
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