The demand for advanced chemistry cell (ACC) battery is likely to grow at a compound annual growth rate (CAGR) of 50% with the help of a thriving local battery manufacturing industry and a robust local supply chain, according to a report by the Confederation of Indian Industry (CII) released on Sunday.
“As a result, India is expected to localise the significant portion of the entire value chain from material processing to pack assembly and integration,” the report added.
In 2022, the demand stood at 20 gigawatt hour (GWh), and may hit 220 GWh by 2030, it said.
The report, done in collaboration with 6Wresearch, is the third one in a series of reports on ‘Roadmap for Future Mobility 2030’.
It also sheds light on the issue of battery costs, which is one of the major concerns affecting the electric vehicle (EV) industry. A battery, in an EV, accounts for about 45% of the overall costs.
“EV is determined primarily by the battery running the powertrain of the vehicle. Advancements in the battery technology space is pivotal for development of better performing EVs,” said Vipin Sondhi, chairman, CII National Committee on Future Mobility and former Ashok Leyland CEO.
He added, “It is imperative for India to not only strengthen the national battery raw materials and manufacturing set-up, but also to become the global trusted supplier of high-quality, innovative battery materials to counter the Chinese supremacy in the domain.”
The report recommends incentivising development of domestic mines as several raw minerals such as cobalt, nickel, lithium, and copper have a negligible reserve, production and refining capacity in India.
It also called for lowering custom duty on critical minerals used in battery manufacturing and incentivising establishment of mineral processing plants to extract required minerals.
“India needs a battery chemical processing industry at par with several other stages of battery manufacturing and various measures in form of incentives and exemptions from various taxes,” the report said.
This may be done by way of incentives from the government, additional funding for R&D, collaboration with countries having advanced technology, and simplification of the regulations related to licenses, approvals and clearances, it said.
ACCs are the new generation of advanced storage technologies that can store electric energy either as electrochemical or as chemical energy and convert it back to electric energy as and when required.
In May 2021, the government approved the production-linked incentive (PLI) scheme on ‘National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ to achieve manufacturing capacity of 50 GWh of ACC with an outlay of `18,100 crore.
The first round of PLI bidding was concluded in March 2022, and three companies were allocated a total capacity of 30 GWh in July 2022. Last month, the ministry of heavy industries announced re-bidding of PLI for 20 GWh ACC battery manufacturing.
ACCs have major applications in the EVs, maintaining grid stability, solar rooftop and consumer electronics. With India’s commitment towards achieving net-zero by 2070, energy storage is expected to play a crucial role in the overall energy ecosystem.