Electric Vehicles are rapidly getting very popular in the Indian market. In fact, in 2021, the EV segment broke all previous records and registered tremendous growth across 2W, 3W, and 4W categories. Today, India is looking to change its profile from a fossil fuel-consuming nation to one that uses renewable energies and green mobility. However, one major roadblock in this journey is that India does not have manufacturing capabilities and we have to be dependent on countries like China and Taiwan for lithium cells. Trontek is one of India’s largest importers of Li-ion cells. So, to know more about the Indian EV battery sector and Trontek’s business prospects, we interact with Mr. Samrath Kochar, Founder and CEO, Trontek.
An overview of the Li-ion battery sector in India and how it is shaping up as several OEMs have announced ambitious plans and are betting big on EVs for the future.
There is a rapid adoption of electric vehicles in India. Data shows that EV 2W sales are up 421% y-o-y to 1,18,000 units while EV 4W sales in 2021 have risen 171% to 9,840 units. EVs are seeing exponential growth in India, especially the two-wheelers and three-wheelers segment. With many automobile companies firming up EV plans, very soon we will see EV equipment infrastructure capability developing in the country. Encouraged by this growth, a lot of OEMs are also expanding into the production of lithium-ion batteries. This is just the beginning of the EV era in India.
What are the major technological advancements and innovations in the battery segment?
Mr. Kochar says that the battery space is constantly evolving. At present, there is a lot of research going on to make Li-ion batteries more energy efficient. We have an R&D team that is constantly conducting extensive research in this direction and on the latest requirements in this area, developing new solutions for the EV ecosystem.
What are the challenges to manufacturing Li-ion batteries in India and the future of the EV ecosystem in the country?
According to Mr. Samrath, India’s EV space, though at a nascent stage, offers the world’s largest untapped market, especially in the 2W segment. 100% foreign direct investment is allowed in this sector under the automatic route. The government is also prioritizing the shift towards clean mobility and multiple production-linked incentives are being pushed for local manufacturing. The government recently even approved ‘The National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ with a financial outlay of Rs 18,100 crores to promote the production of domestic cells and reduce import-dependence.
India has made a good start in the drive towards EV adoption. The scope of development, however, rests on the availability of capital for OEMs, battery manufacturers, and charging as well as improved infrastructure and consumer awareness. Currently, the biggest challenge is posed for the battery manufacturers, which is the most critical component of an EV. Looking at the EV plans of several auto companies, the country needs a minimum of 10GWh of li-ion cells by 2022. Unfortunately, India does not have manufacturing capabilities and merely assembles imported lithium cells from China and Taiwan. India has no domestic source of lithium and cobalt, the key materials of lithium cells.
Across the board, all battery makers in India are facing a shortage of lithium-ion cells as China is unable to cope with the increasing demand amid a raw material shortage. Our worries have further heightened with the steady rise in prices of raw materials like Lithium and Cobalt. In addition, there are challenges related to supply-chain constraints, and the availability of raw materials is skewed towards certain global markets. Unless these challenges are countered, it will be difficult to bring down the import-dependence for energy storage systems in India.
Since Trontek is an importer of Li-ion cells, how has been the impact of the shortage of cells from China?
Supply chain bottlenecks across the world due to disruption in shipping and shortage in the procurement of finished cells from China have impacted battery production in India. We buy finished cells from China and China itself is facing a shortage of raw materials. Because of the shortage of cells, we were forced to increase our prices and expect a further price rise in March 2022.
According to you, which geographies and segments in India will drive the EV revolution?
The recent report by the Government gives a good indication on the markets that are growing and largely participating in the EV adoption in India, with Uttar Pradesh, Delhi, and Karnataka leading in terms of EV registration. There have been positive developments and expansion by companies in states like Andhra Pradesh, Bihar, Maharashtra, and Telangana, to increase the uptake of electric vehicles in the country. Karnataka was the first state to introduce a comprehensive EV policy and has emerged as a hotspot for EV business in India. Tamil Nadu is also growing at a constant pace, owing to its advantages of supply ecosystem, larger land parcel, and proximity to ports.
Although central and state governments are putting efforts to drive the demand for EVs in India, traction can only be seen in 3W and 2W segments since they are known to be the largest in number and pollute the environment significantly. The 3W segment, particularly e-rickshaws, is driving the high adoption rate of EVs. The exclusion of 4W private vehicles from FAME-II, high cost, unavailability of adequate charging infrastructure, range anxiety, etc. is causing the 4W segment to witness lesser traction. EVs in India will be a rural phenomenon with 3Ws leading the race, followed by 2Ws and further 4Ws.
Trontek’s strengths and weaknesses and the company’s growth journey so far?
Mr. Kochar shares Trontek’s growth journey. He adds, established in 2004, Trontek started off as a small trading company for electronic components for TV, Radio, and other electronic gadgets. In 2007, Trontek began offering lead-acid batteries for stationery energy storage. Over the next few years, the company expanded its portfolio to 2W mobility. It was in December 2014 when e-Rickshaws made their way into the Indian market that Trontek identified the untapped potential of electric vehicle batteries. The company was amongst the first to launch e-rickshaw batteries to cater to the emerging demand.
Moreover, Trontek introduced lithium-ion batteries for EVs in January 2017 to serve e-bike, e-tricycle, and e-Car segments as well as supplying to major OEMs in the Indian mobility segment. The company claims that it has the unique distinction of being the first Indian player to introduce batteries for EVs in 2014, as well as to be the first company to introduce Li-ion batteries in 2017. Today, Trontek claims to hold the ‘Numero Uno’ position in the Indian EV battery market. The first-mover advantage and technological innovations adopted in the Battery Management Systems developed by the R&D team have helped Trontek gain a strong foothold in the fast-growing EV battery space, adds Mr. Kochar.
By when can we expect Trontek to start manufacturing Li-ion cells locally in India?
The Government of India has unveiled an Advanced Chemistry Cell scheme to encourage the domestic production of Li-ion cells in the country. The company hasn’t revealed any clear timeline to start manufacturing Li-ion cells locally in India. Mr. Kochar says that they are still studying the scheme and have not finalized the plans yet.
Advantages of being a Make-in-India manufacturer and Trontek’s product range in the country?
Mr. Samrath says that India has an inherent advantage when it comes to lithium-ion batteries. India is world-class in Battery Management System (BMS) capabilities. Assembly cost is cheaper in India and the technology & software used in BMS is the expertise of India. With best-in-class manufacturing capabilities and a technology-driven team, today Trontek has a range of products for EVs which include, Lithium-ion e-rickshaw batteries and E-bike batteries, Lithium-ion solar street lights, Lithium-ion phosphate storage batteries, Lithium-ion batteries for electrical material handling (MHE), Electric vehicle supply equipment and EV chargers. We currently have a range of about 10 EV charging solutions catering to different classes of EVs. Our R&D team is also looking at new solutions in this space.