India is at the cusp of global transition in the world of mobility. As the country takes strides to match pace with net zero emission targets world over and its own commitment at COP26, the need to build a robust, localised, EV value chain is becoming more important.
A well structured ecosystem can provide the strategic impetus in terms of reduction of emissions, savings on raw materials and offsetting the loss of manufacturing jobs from traditional internal combustion engines (ICE) vehicles – making the country greener, smarter and contributing to the national productivity.
A new report released by Arthur D Little (ADL), titled ‘e-Mobility: Cell Manufacturing in India’ highlights that, “Indigenous EV battery manufacturing, will increase local EV adoption and make India a large export hub in the world.” However, the report pointed out that the “nation needs to invest over $10 billion (Rs 80,790 crore) to boost cell manufacturing and raw material refining, just to serve the local demand of Li-ion batteries by 2030, and to create a million new jobs.”
‘India’s Li-ion battery demand will grow from 3 GWh currently to 20 GWh by 2026 and 70 GWh by 2030, 70 percent of the requirement is currently imported from China and Hong Kong, as per the report.
Talking about the finding from the research, Prathmesh Chaudhari, Senior Manager, Automotive Practice, ADL India told Express Mobility, “China is always thinking 50 years ahead and the strategically acquired mines in Congo Indonesia, Australia, and other countries, whereas India is dependent on imports, so it is a scary finding.”
He added that one of the critical industry challenges is India’s limited access to key raw materials like lithium, nickel, cobalt, and manganese, that account for over 80 percent of cell cost, as natural reserves for these materials are concentrated in a few countries. “Besides, India lacks adequate refining capabilities for these materials. Thus, localising the Li-ion battery supply chain is key to India’s ambition of becoming self-reliant and positioning it as a global EV manufacturer and exporter,” he explained.
Will alternatives help
While EV cells are the most critical part of the e-mobility value chain, the Indian EV industry suffers from overdependence on imports, limited local manufacturing, finite access to raw materials, and refining capacities.
Large investments in R&D, supportive government policies, foreign direct investment inflows, and aggressive acquisition of raw material resources across geographies can help India achieve self-reliance in Li-ion batteries.
Talking about the alternatives to lithium-ion, like the zinc-gel or sodium-ion batteries, Chaudhari said, “As of now, these alternatives are at the inception phase, but we have to invest in R&D. Lithium is something that has already been for a long time now and it’s proven on a large scale across countries.”
The other options are under development and are yet to be tested at a large scale. This if proven to be effective can be good news for India as it has more access to these resources. “So if that happens, really good, but it will take time. There have emerged a few OEMs trying to build new technologies, new cell configurations, let’s see how we can reduce the cost of the battery as well as make it more suitable for the Indian environment,” Chaudhari rationalised.
The way forward
The ADL report highlighted that to thrive, Indian battery players should invest in collaborative R&D in advanced cell chemistries like sodium-ion, metal-air and designs that are safer, sustainable and economical in the Indian context and could be commercialised at a large scale. Global partnerships, joint ventures and acquisitions can boost capabilities and gain a robust talent edge.
Improving bilateral ties and investments in countries rich in natural resources of raw materials, incentivising local players, promoting sustainable domestic graphite mining with the relaxation of stringent regulatory restrictions, increasing import duties on cells and batteries, tax subsidies, and PLI/incentivising manufacturing and recycling of batteries, development of SEZs/lithium parks and conducive regulations will accelerate the momentum of cell manufacturing localisation.
Though the government’s efforts such as FAME I & II policies and there has been an increase in OEMs and new-age start-ups venturing into battery manufacturing, these may not be enough to cater to the growing demand.
Moreover, these are not long-term schemes that would sustain and it is high time we start realising this. “India, currently, is at a stage where it can become a global leader when it comes to becoming a combination of ‘innovation+sustainability’. It is time we get going, this is the time to act proactively and lead the world before we are too late and have a tough competition in the global market,” Barnik Chitran Maitra, Managing Partner & CEO, India & South Asia reiterated.