Companies line up plans for LI battery
More than a dozen companies have started importing lithium-ion cells from countries such as China, Taiwan, Korea and assembling batteries.
The development has come close on the heels of the Prime Minister’s Office (PMO) directing that most of the incentives of Rs 5,500 crore earmarked for the second phase of the FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) India Scheme be used to encourage local manufacturing of lithium-ion batteries, which form the core of electric vehicles.
“There has been a surge in interest (to manufacture batteries locally) given the government’s thrust on e-mobility. More than a dozen companies have started importing lithium-ion cells from countries such as China, Taiwan, Korea and assembling batteries. The batteries being manufactured locally are costlier, but are superior in quality when compared with Chinese counterparts. There are also more organised players who are working towards developing an ecosystem for electric vehicles,” said Sohinder Gill, director general, Society of Manufacturers of Electric Vehicles (SMEV).
Though sales of electric vehicles have remained limited due to high costs and lack of charging infrastructure, industry insiders informed, the potential for battery makers is huge going ahead.
A senior industry executive who did not wish to be identified said, “In future, even if sales of electric cars for personal use remain muted, batteries will be required by fleet operators running electric cars. Besides, there are more than 2.5 million e-rickshaws operating in the country with inferior lead-acid batteries. These have short replacement cycles. The opportunity is massive.”
“Apart from supplying to original equipment manufacturers, there is a secondary market which has to be catered to,” concurred Gill, adding, “There are 400,000 lead-acid powered electric two-wheelers running on Indian roads today. Lithium-ion batteries come at a premium but have 3-4 times the life of a lead-acid battery. It becomes an obvious choice for existing owners looking to replace batteries.”
The Indian government is looking to promote sales of electric vehicles to reduce vehicular pollution.
Apart from component makers, battery manufacturers and power solutions providers, leading vehicle manufacturers too have evinced interest in the space.
While Maruti Suzuki’s parent company Suzuki Motor Corporation (SMC) has tied up with Toshiba and Denso to set up the country’s first lithium-ion battery manufacturing facility in Gujarat at an investment of Rs 1150 crore, homegrown auto major Mahindra & Mahindra has firmed up plans to pump in Rs 1000 crore (through its arm Mahindra Electric) to expand electric vehicle manufacturing capacity at its Bengaluru facility, set up a R&D centre and a new battery manufacturing unit in Chakan, Maharashtra. Mahindra has forged an alliance with South Korea’s LG Chem to make lithium-ion batteries in India.