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EV Battery and Localisation: Is India doing enough to sustain the Indian EV Supply Chain

To increase EV adoption in India and position the nation as a value chain member, the government of India must boost private investment in addition to providing subsidies.

EV Battery and Localisation: Is India doing enough to sustain the Indian EV Supply Chain

By Yatin Gupte

It is commendable that the government of India has maintained and increased its commitment to promoting a gradual transition to a transportation system dominated by electric vehicles (EVs). According to the research the sector is estimated to emit 142 million tonnes of carbon dioxide (CO2) annually, of which 123 million are linked to the road transport sector alone. With regard to this issue, electric mobility provides a practical answer and aids in preserving the equilibrium between the nation’s energy demand, energy storage, and environmental sustainability. Additionally, e-mobility offers a unified response to multiple issues relating to health, the environment, and the affordability of vehicles.

The government of India under the ‘Atmanirbhar Bharat’ which translates to ‘self-reliant India’, the scheme is pushing the industry to manufacture the components locally to develop a domestic supply chain for electric vehicles. Lithium-ion batteries are the leading technology for the EV transportation sector because of their high energy density, minimal self-discharge, quick charging, and lightweight design. However, the fact that China controls the majority of the lithium creates a substantial barrier for the EV industry in India.

To increase EV adoption in India and position the nation as a value chain member, the government of India must boost private investment in addition to providing subsidies. With the FAME (Faster Adoption and Manufacturing of Electric Vehicles) initiative, the nation has already begun to do so. The programme’s objectives were to encourage EV adoption, accelerate local manufacturing and provide manufacturers with incentives to produce EVs in India. 

However, in a price-sensitive Indian market, purchasing costs continue to be a problem, and this is where localisation has a significant impact. Price is a crucial component in defining the future of EVs in the nation. A production-linked incentive programme was also introduced by the government to entice businesses to begin producing EV batteries locally. During this process, policy coordination and design for end-of-life EVs might also be launched, especially in regards to, urban mining and EV battery recycling, so that the valuable metals in spent car batteries can be efficiently reused.

Discovering more effective ways to produce and recycle batteries has also been established by national research funders. One crucial objective is to create methods to recover valuable metals economically enough to compete with newly mined ones because it is still generally cheaper to mine metals than to recycle them. Reducing the usage of metals, improving recycling, and ramping up the volume are some potential approaches.

In order to promote local innovation, the sector ultimately needs long-term adoption. The government’s admirable and foresighted PLI scheme is a step in the right direction. Since there may be a demand for EVs, but you may not always be able to meet it at the correct price without securing the supply chain, NITI Aayog is working to promote that innovation and bring manufacturing capability to the nation.

India can overcome significant obstacles to EV battery recycling and take the lead over the next decade with the correct incentives and policy framework.

The author is Chairman and MD, Wardwizard Innovations and Mobility.

Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited).

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First published on: 04-12-2022 at 12:35 IST