Contribution to Economy: Manufacturing Advanced Chemical Cell Battery in India
India’s electric car stock grew from 7,000 vehicles in 2017 to 12.74,000 vehicles in 2020, with the market showing a 82% growth rate. In 2020, a total of 1,19,648 new electric vehicles were registered as per data provided by the Ministry of Heavy Industries in India. Lithium is used mainly in battery industry.
The mobile and electronics industry in India is fast growing and diverse with a significant reliance on high performance batteries across a wide range of applications. Mobile phones, power banks, IT hardware, telecom devices, smart agriculture, defence electronics, and other portable devices all require high density and safe integrated batteries. As India and the global population continue to move towards a highly connected and digitalized society, the demand for smart portable devices will naturally grow.
The India lithium-ion Battery Market was valued at US$ 1.91 billion in 2021 and is estimated to reach a value of US$ 5.2 billion in 2029. The Global India lithium-ion Battery Market size is estimated to grow at a CAGR of 15.3% over the forecast period.
The annual market for stationary and mobile batteries in India could surpass US$15 billion (~ Rs. 1.15 trillion) by 2030, with almost US$12 billion from cells and US$3 billion from pack assembly and integration, under the accelerated case scenario. Even under a more conservative case it amounts to an annual market of US$ 6 billion.
Lithium Ion is traded all around the world. The data provided on the export analysis shows that there are almost 95 countries and territories, which actively import Lithium Ion from India. The combined value of total export is 9.34 USD million.
From the perspective of the data on Lithium Ion export, India’s top 5 trade partners who import Lithium Ion from Indian exporters are China, Hong Kong; Nigeria; USA; Singapore; and Thailand. Although the total exports value of the top 5 countries is 6.01 USD million which is the 64.35% of the total export value of Lithium Ion.
Lithium Imports in India
Chennai-based Munoth Industries Ltd (MIL), promoted by Munoth group, is set to commission India’s first full-fledged lithium-ion cell manufacturing unit at Electronic Manufacturing Cluster 2 [EMC 2], located at Tirupati in Andhra Pradesh. The factory will employ about 250 workers. The 15,000 sq mt lithium cell factory has come up on a 30-acre site with a Phase-1 investment of Rs. 165 crore. It will have an initial capacity of 270 MWh and can produce 20,000 cells of 10Ah capacity every day. The company has technical tie-ups with China-based Tianjin Lishen and BPI.
Under Phase 2 and 3 expansion, the company will commence the establishment of additional capacity for energy storage systems and electric vehicles. This will entail an investment of ₹635 crore, taking the total investment to about Rs. 800 crore, and the total employment will increase to about 800.
Market demand and supply
Currently, India has a negligible presence in the global supply chain for manufacturing of advanced cell technologies. Advanced batteries are a cornerstone technology, and their manufacturing within India could allow domestically sourced batteries to cater to the demand generated from EVs, grid storage applications, consumer electronics, and other uses. It is an opportune time for India to step forward and support the development of a domestic battery manufacturing ecosystem that meets its future energy storage market needs and helps reduce its dependence on imports to meet the future advanced energy economy demands.
In the accelerated scenario, battery demand is expected to rise to 260 GWh by 2030 (see Exhibit 1). This would require nearly 26 gigafactories with an average advanced battery production capacity of 10 GWh per year. The conservative scenario battery demand would require 10 gigafactories by 2030. Since India has no manufacturing plants at this scale now, developing and rapidly scaling its advanced battery manufacturing industry is expected to require focused and coordinated public-private actions.
For grid operators, energy storage systems can provide a suite of ancillary services that supports the reliable and efficient operation of the electricity grid. The applications described below are largely differentiated by the time horizon for which the services are needed, ranging from fast-responding frequency regulation to longer duration daily storage or renewable firming.
Customer-directed services provide benefit to the end-user and typically require installation of the system behind the customer meter. The monetary value of these services flows directly to the electricity customer in the form of bill savings or avoided costs. However, the provision of these services will inherently provide value to system operators and utilities because the customers program their system to respond to price signals from the utility, such as time-of-use (ToU) tariffs, demand charges, or other self-generator-related price signals designed to optimize grid operation.
In order to stimulate growth in domestic ACC manufacturing and encourage development of dedicated gigascale (greater than 5 GWh/year in battery cell production) manufacturing capacities, the government of India called for the participants to bid for the scheme.
To aggressively shift towards renewable energy, energy storage, and EVs, the Government of India announced a target of 500 GW of non-fossil fuel energy deployment by 2030,4 and has signalled strong support of electric mobility through FAME II and other supportive policies,5 including the recently announced Auto (US$3.5 billion) and Semiconductor (US$10 billion) Production Linked Incentive (PLI) scheme.
Government has announced a production-linked scheme for potential manufacturers, and has got good responses. Four companies including Reliance New Energy Solar, Ola Electric Mobility, Hyundai Global Motors Company and Rajesh Exports Limited, were selected last month to receive incentives under the government’s Rs 18,100 crore Production Linked Incentive (PLI) scheme. They will have to set up the facility within two years.
Ms. Vaibhavi Pingale is a Visiting Faculty of Economics at Gokhale Institute of Politics and Economics, Pune & at Savitribai Phule Pune University. She is pursuing her PhD. She has been actively writing media articles other than academic research.