Domestic LiB Manufacturing is the next Sunrise Industry

The Indian  battery market is attractive to domestic as well as international companies after the recent plan of government to promote indigenous battery manufacturing.

Domestic players are in the early stages of making manufacturing plants. This includes battery company Exicom, renewable energy company Hero Future Energies, diversified company Ravin Group, the Bengaluru-based Sun Mobility and Bharat Heavy Electricals (BHEL) and several others.

Unlike overseas companies, Indian players are cautious and waiting to see the domestic policy before taking the plunge.

Battery manufacturers are basing strategy on potential demand in India once electric vehicles (EVs) and renewable energy projects take off. According to a 2-year-old study by US’ Variant Market Research, the lithium ion batteries (LiB) market in India is to reach $5 billion in 2024, growing 26% a year. Creating battery manufacturing capacity would take up a big part of the investment required to create an EV.

Japanese auto major Suzuki, along with Denso and Toshiba, pooled $180 million last year to build a LiB plant in India.

The economics favours LiBs. Cell prices have dropped 73% — from $1,000 per kWh in 2010 to $272 per kWh in 2016.

The US-based Rocky Mountain Institute, in a more recent study, says switching completely to EVs in 2030 can create a domestic battery market of $300 billion.

All battery manufacturers now import the cells and assemble the battery, which can capture not more than 30% of this value. If India imports only raw materials lithium and cobalt, about 80% of the value can be captured in the country, they feel.

EnerBlu is now investing $400 million in a new factory, using an innovative technology that can increase the life of the battery, dramatically enhance power and also make it work at high temperatures. EnerBlu touts it as the ideal solution for India, saying it is close to signing up a leading automobile company for a joint venture.

Taiwan-based power management firm Delta Electronics is also making plans for India. It has bought 65 acres in Krishnagiri near Bengaluru for a battery manufacturing plant. If policies work out positively, Delta hopes to roll out LiBs from the unit in about two years.

Delta is bringing what is known as the NMC battery, which uses nickel, manganese and cobalt in the positive electrode. Ravin Group is investigating the benefits of lithium ion as well as sodium ion batteries. LiB is the most compact possible, but sodium ion batteries have their uses in spite of their bulk.

But not everyone is convinced yet. In fact, some automobile industry leaders have even questioned the wisdom of going ahead full steam on electric vehicles because India would then be dependent on lithium imports in large amounts. The choice is between dealing with the Arabs or Chinese, as India may only end up shifting dependence from oil to lithium in its imports.