As we dive into the world of electric vehicles and its green world vision to lead us into more sustainable paths, we come across an important key component, and that’s its EV batteries, determining the performance, range, and cost of EVs.

India also has huge potential for domestic manufacturing of EV batteries; it has a large and growing demand for EVs, abundant availability of raw materials, and a strong manufacturing base. But we cannot avoid several challenges, such as high dependence on imports, a lack of technology and innovation, and low economies of scale.

The true potential for domestic manufacturing of EV batteries in India can be realized through partnerships, and government support is essential. The partnerships among various stakeholders, such as battery manufacturers, automakers, research institutions, and civil society, help to create a collaborative and competitive ecosystem for EV battery development and deployment.

The government’s support, such as policies, incentives, and infrastructure, helps create a conducive and enabling environment for EV battery manufacturing in India.

The examples of partnerships and government support for domestic manufacturing of EV batteries in India are: –

• Partnerships:
• One of India’s leading conglomerates, Tata Group, announced its plans to invest $ 2 billion in setting up a lithium-ion battery manufacturing plant in Gujarat, in partnership with the state government and other global players. The plant with a capacity of 10 GWh and caters to the demand for EVs and energy storage systems in India and abroad.
• Reliance Industries, India’s largest private sector company, acquitted a majority stake in Nexcharge, a joint venture between Exide Industries and Leclanché, a Swiss battery maker. India’s first lithium-ion battery manufacturing facility, Nexcharge, with a capacity of 1.5 GWh, produces batteries for EVs, telecom towers, and renewable energy applications.
• Indian Oil Corporation, India’s largest oil refiner, partnered with Phinergy, an Israeli startup, developing and manufacturing metal-air batteries for EVs in India. Metal-air batteries use metals such as aluminum and zinc as anodes, offering higher energy density, lower cost, and longer range than lithium-ion batteries.
• Government support:
  • FAME India Scheme, providing demands for incentives, charging infrastructure support, technology development support, and pilot project support for EVs, covering EV batteries and their components. The scheme offers subsidies, tax exemptions, and interest subventions for EV batteries and their manufacturers.
  • PLI Scheme, provides incentives for manufacturing advanced chemistry cell (ACC) batteries for EVs, aiming to attract investments of Rs. 45,000 crore and create a cumulative output of Rs 1.8 lakh crore in the next five years. The scheme offers incentives ranging from 5% to 12% on the incremental sales of goods manufactured in India for five years.
  • The national mission on Transformative Mobility and Battery Storage, launched by the government of India in 2019, aims to promote the domestic manufacturing of EVs and batteries and create a comprehensive ecosystem for EVs in India. The mission also proposed a set up of 50 GWh of battery manufacturing capacity in India by 2025 and created a phased manufacturing program for EVs and batteries.

Let’s look at some of the data facts,

• India’s EV battery demands are expected to grow from 3GWh in FY 2021 to 20 GWh by FY 2026 and 70 GWh by FY2030.
• India imports almost 70% of its Li-ion cell requirement from China and Hong Kong.
• Tata Group plans to invest $2 billion in setting up a 10 GWh Li-ion battery plant in Gujarat.
• Reliance Industries acquired a majority stake in Nexcharge, a 1.5 GWh Li-ion battery facility in Gujarat.
• A budget allocation of Rs. 10,000 crores under the FAME India Scheme aims to support 5 lakh e-three-wheelers, 7 lakh e-two-wheelers, 55,000 e-passenger vehicles, and 5,000 e-buses.
• A budget allocation of Rs 18,100 crore by the PLI Scheme to attract investments and create a cumulative output of Rs. 1.8 lakh crore in the next five years.
• The National Mission on Transformative Mobility and Battery Storage aims to set up 50 GWh of battery manufacturing capacity in India by 2025.

Let’s check out the market share of EV batteries in India and the future forecast: –

Battery Type	Market Share in 2020	Market Share in 2030	CAGR (2020-2030)
Lithium-ion	70%	80%	10%
Lead-acid	25%	15%	-5%
Other	5%	5%	0%

The table shows the market share of different types of EV batteries in India in 2020 and the projected market share in 2030, along with the compound annual growth rate (CAGR) for each battery type. The table is based on the assumptions and estimates from various sources, such as Bain & Company, Mordor Intelligence, and Mobility Foresights.

According to the table, lithium-ion batteries are expected to dominate the EV battery market in India, with an 80% market share by 2030, followed by lead-acid batteries with a 15% market share, and other batteries with a 5% market share. Lithium-ion batteries are expected to grow at a CAGR of 10%, while lead-acid batteries are expected to decline at a CAGR of -5% and other batteries are expected to remain stagnant at a CAGR of 0%.

The market share of EV battery companies in India: –

Company Name	Battery Type	Market Share in 2020	Market Share in 2030	CAGR (2020-2030)
Exide Industries Ltd	Lead-acid	40%	25%	-5%
Amara Raja Batteries Ltd	Lead-acid	35%	20%	-6%
Tata Group	Lithium-ion	10%	25%	10%
Reliance Industries	Lithium-ion	5%	15%	12%
Indian Oil Corporation	Metal-air	2%	5%	10%
Others	Various	8%	10%	3%

The table shows the market share of different EV battery companies in India in 2020 and the projected market share in 2030, along with the compound annual growth rate (CAGR) for each company. The table is based on the assumptions and estimates from various sources, such as Arthur D. Little, Mordor Intelligence, Trade Brains, and TechSci Research.

According to the data available, it shows that Exide Industries Ltd and Amara Raja Batteries Ltd are the market leaders in the lead-acid battery segment, but the market share is expected to decline in the next decade, due to the increasing preference for lithium-ion batteries.

Tata Group and Reliance Industries are the emerging players in the lithium-ion battery segment, and their market share is expected to increase significantly, due to their investments and partnerships in the EV battery manufacturing sector.

Indian Oil Corporation is the pioneer in the metal-air battery segment, and its market share is expected to grow moderately, due to its innovation and collaboration with an Israeli startup.

Nickel-metal hydride, sodium-ion, and solid-state, EV batteries are offered by various other domestic and foreign players.

Sources:- OliverWyman, IEEFA, Arthur Little, Invest India, Statista, bain, mordorintelligence, mobilityforesight, economictimes, bisinfotech, evreporter, tickertape, tradebrains, techsciresearch

FAQs

1. What is the current state of domestic EV battery manufacturing in India?

• India currently lags behind in domestic EV battery manufacturing, heavily relying on imports from countries like China.
• However, the government and private sector are increasingly focusing on building domestic capacity.
• Several companies have announced investments and partnerships to establish manufacturing facilities in India.

2. What are the potential benefits of domestic EV battery manufacturing in India?

• Reduced dependence on imports: Less reliance on foreign manufacturers will improve supply chain security and potentially lower costs.
• Economic growth and job creation: Domestic manufacturing can create new jobs in the battery sector and stimulate various related industries.
• Technological advancement: Increased investment in R&D can foster innovation and technological advancements in battery technology.
• Boost to the domestic EV ecosystem: A robust domestic battery industry will support the growth of the entire EV ecosystem in India.

3. What are the challenges in establishing domestic EV battery manufacturing?

• High initial investment: Setting up battery manufacturing facilities requires significant capital investment, which can be a hurdle for new entrants.
• Technological expertise: India needs to develop strong technical expertise in battery design, development, and production.
• Raw material availability: Establishing a secure and sustainable supply chain for key raw materials like lithium is crucial.
• Competition: Existing global players have an established presence and economies of scale, making it challenging for domestic manufacturers to compete initially.

4. What role can partnerships and government support play in promoting domestic EV battery manufacturing?

• Government incentives: Financial incentives like subsidies, tax breaks, and loan guarantees can encourage companies to invest in domestic manufacturing.
• Technology transfer and collaboration: Partnerships with established foreign companies can facilitate technology transfer and knowledge sharing.
• Skilling and training programs: Government initiatives to train and upskill the workforce are crucial to address the talent gap.
• Developing a supportive regulatory framework: Implementing regulations that encourage domestic manufacturing, ensure quality standards, and promote fair competition is essential.

5. Is there potential for India to become a major player in domestic EV battery manufacturing?

• India has the potential to become a major player in domestic EV battery manufacturing. Its large domestic market, growing demand for EVs, and government initiatives show promise.
• However, overcoming challenges, building strong public-private partnerships, and fostering innovation will be crucial for long-term success.