Why is India facing localisation challenge in EV battery supply chain

According to recently released industry reports, India’s Electric Vehicle (EV) Market is predicted to grow to a $7.09 billion opportunity by 2025. To attain 100% EV mobility by 2030, the Indian government is also revising its policies. In fact, a strong CAGR development of 42.38% is predicted for the Indian EV industry. The estimation of growth is, however, also accompanied with worries about several issues, such as an inadequate supply chain, specific government policies, consumer behavior, infrastructure, etc.

A concern is also raised about the difficulties that the grid may encounter as EVs become more common in India. Industry research predicts that by 2030, rising EV use would cause a rise in power consumption up to 100TWh. With the increasing penetration of renewable energy sources into the market, the need of providing quality of power will emerge more than the need of power generation. Due to a scarcity of lithium, India still relies heavily on imports to produce EV batteries, which presents a significant barrier for businesses looking to engage in the country’s EV market. There is very little synergy because the capacity for battery manufacturing still necessitates adequate planning.

The recent announcement of an Advance Cell Chemistry (ACC) Manufacturing PLI Scheme has brought major companies in India to enter the market with local manufacturing of cells in India.

However, with this PLI scheme the country has secured the supply of Li-ion cells & eliminated major dependency on cell imports from China, Japan, Korea, etc. Further, dependency on major components like Lithium, Nickel, Cobalt, Manganese, etc. needs to be secured. Going forward, there will be a major need to introduce & implement a PLI scheme for raw material sourcing, manufacturing & refining to have a strong hold on the complete Electric Vehicle supply chain. As of now, India do not have any hold on lithium reserves which contributes to the major component in this entire supply chain ecosystem. To strengthen the ecosystem in India, refining processes also needs to be regularized & implemented 100% locally. This will make India as a country to put a mark on the globe as a Manufacturing Hub of Electric Vehicles covering all the upward & downward flow of supply chain. While initiatives are driven & encouraged by Indian Government and MNC’s to take care of the upcoming demand of Electric Vehicles in India.

To prevent the battery pack from needing to be replaced for the duration of the vehicle, more research is being done to increase the life of the cells. Another way to secure the supply chain ecosystem in an efficient & sustainable manner would be to utilize the existing deployed Li-ion Batteries in market. It’s encouraging to see that Government of India have also initiated & drafted policies for Battery Recycling in India. To recover the minerals from the cells that may subsequently be utilized in new cells, numerous recycling facilities are being established in various countries.

Through recycling of battery packs, around 95-99% materials can be retrieved which can be re-used to make new battery systems. This will mainly help in reducing dependency on lithium imports & other raw material sourcing from other countries.

With a collaborative approach from all stakeholders in the EV market space, the bottleneck of EV battery supply chain can be resolved amicably.

source : https://timesofindia.indiatimes.com

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