Last Update 15 May 2023

What would be the response of battery OEMs for the EV demand surge in India?

Global battery demand would be shaped by China till 2030

Globally the uptake of EVs would go on the rise following the spike observed in the European and US markets. Automotive and battery manufacturers however may face difficulties majorly due to plagued supply chain, and many of them are resorting to build their own gigafactories through own capabilities or through partnerships. For India, the trend is not different either with OEMs planning to set up gigafactories in the country. In fact, Ather Energy has over a dozen patents and is investing big in battery pack manufacturing.

Battery manufacturing in India may prove to be a game changer and the sector is expected to attract big players across the globe in the segment. By 2030 the segment is expected to demonstrate a CAGR of nearly 90% with an overall size exceeding $150 Billion. These investments would be spread across R&D, battery manufacturing technology and supply chain. The value chain of battery would expand nearly 10 times the current levels in the country by 2030. 40% of the global demand of li-ion batteries would come from China and India could contribute to nearly 5%.

Mr. Ravi Shekhar, Director & Head, of Eninrac Consulting says “Securing raw materials and machinery supply will hold the key for India’s battery manufacturing space in the coming decade. Companies could explore long-term agreements, and co-funding, acquisition, and streaming arrangements with raw material and equipment machinery companies to ensure adequate supplies. Especially, post the discovery of lithium reserves of nearly 5.9 million tones in the country securing a robust battery supply chain for EV OEMs will be key and we might see many OEMs plunging to set up gigafactories in the country by 2030. This might help avoid supply shortages in construction materials, skilled labor, and machinery and thus mitigate the significant delays that often occur in new production capacity projects today. Further, companies could consider securing access to capital, rigorously plan and execute complex permitting processes, and navigate import and export bureaucracy to ensure a scheduled execution.”

OEMs shall focus on strengthening the supply-chain of batteries in India

In order to be in sync with the shaping demand OEMs shall focus upon avoiding delays and cost overruns. This would be done if the OEMs start doing it themselves that is considering the sourcing of battery equipment and raw materials on their own. Since all, aspects of battery value chain will grow by 2030 and at decent pace the cell production and material extraction shall become the largest space of opportunity in India, especially with the discovery of latest reserves of lithium in Jammu & Kashmir. The pace of growth in adaptation EVs however shall remain crucial to scale the battery manufacturing in India and the largest challenge will be the availability of manufacturing equipment. Apart from manufacturing equipment companies will also focus upon procurement of raw materials to control costs and scale their manufacturing in lower lead time.

- Communications Team


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