With more than two-thirds of manufacturers prioritizing mobility transition, the adoption of electric transport will only scale in the upcoming decade. Global power players and leading innovators have all hopped into the EV segment and are currently taking steps to ensure a smooth transition from ICE vehicles to EVs. This growing demand for EVs brings along manufacturing responsibilities for companies in the battery segment. An EV operates with fewer parts than an ICE one, but its battery is crucial in terms of functioning and pricing. The persistent issue with EVs is range anxiety which can be mitigated only with a powerful battery. ICRA estimates investments in battery manufacturing to surpass 9 billion USD post-2030.
35-40% of an EV’s price is due to its battery. Therefore, investment in battery manufacturing is key to accelerating EV penetration. India is not self-sufficient in cell manufacturing, and Original Equipment Manufacturers (OEMs) depend on imports. Local manufacturing needs to rise to support the transition, and cell manufacturing units should be closer to OEMs to increase process efficiency. Local sourcing will also guarantee better cell performance in Indian climatic conditions.
The Government of India has also worked with the leading EV companies to incentivize Advanced Chemistry Cell (ACC) storage per the PLI (Product-Linked Incentive) scheme. These schemes emphasize expanding domestic manufacturing, infrastructure, and storage capacities.
R&D experts are considering multiple cell chemistries, and the most popular one is Lithium Nickel Manganese Oxide, but Lithium Iron Phosphate may replace it in the time ahead. New technologies and chemistries are in the developmental phase and will be commercially ready slowly.