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Lithium-ion battery charging the future green
Industry News- Jul 29,24
The surge in demand for lithium-ion batteries in India is primarily due to their widespread usage across various industrial sectors, including telecommunications, healthcare, and uninterruptible power supply (UPS) systems.
The rapid growth of lithium-ion battery manufacturing in India is driven by the increasing demand for clean energy solutions, particularly in the electric vehicle (EV) sector. The Indian government is aiming to achieve high adoption rates of EVs by 2030, making lithium-ion battery production a focal point of national energy policy. The article delves into various aspects of lithium-ion battery manufacturing in India, exploring market dynamics, technological advancements, challenges, and future prospects.
Rising demand
The surge in demand for lithium-ion batteries in India is primarily due to their widespread usage across various industrial sectors, including telecommunications, healthcare, and uninterruptible power supply (UPS) systems. However, the most significant driver is the increasing adoption of electric vehicles. The Indian government aims to achieve 30% electric vehicle penetration by 2030, focusing on electrifying two-wheelers, three-wheelers, and commercial vehicles. This push is part of a broader strategy to reduce dependence on fossil fuels and cut greenhouse gas emissions.
The lithium-ion battery market in India is projected to reach ?1.77 trillion by 2028, expanding at a compound annual growth rate (CAGR) of approximately 20.09% during the 2023-2028 period. This growth is supported by various government initiatives, including the National Mission on Transformative Mobility, which aims to promote the domestic production of lithium-ion batteries.
Government policies and subsidies are instrumental in driving the adoption of EVs and supporting the growth of the lithium-ion battery industry. For instance, the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme offers incentives for the purchase of electric vehicles and supports the development of charging infrastructure. Additionally, the Production-Linked Incentive (PLI) scheme aims to boost domestic manufacturing by offering financial incentives to companies engaged in the production of advanced chemistry cell (ACC) batteries.
Advancements
Technological advancements in lithium-ion batteries, such as faster charging times and extended runtimes, are expected to decrease operating expenses for consumers. The sustainability of electric bikes is also driving the market with response to increasing demand for green mobility.
Despite India’s reliance on imports for over 70% of its lithium-ion cell needs, domestic and multinational efforts are actively addressing the growing demand. For instance, the construction of a gigafactory in Hyderabad and participation in government incentives are crucial steps towards self-sufficiency.
Prominent market players such as Exide Industries, Amara Raja Batteries, and Ola Electric are taking considerable strides in establishing local Li-ion manufacturing capabilities. Exide Industries, through its subsidiary Exide Energy Solutions, is nearing the completion of a green-field 12-gigawatt lithium-ion cell manufacturing plant in Bengaluru. Similarly, Amara Raja has signed a licensing agreement with GIB EnergyX Slovakia for lithium-ion cell technology, enabling the company to manufacture world-class LFP cells.
In addition to this, several startups and new entrants are entering the market, bringing innovative solutions and driving competition. Companies like Log9 Materials, a Bengaluru-based startup, are developing advanced battery technologies tailored to Indian conditions, such as rapid charging and enhanced thermal management. These innovations are expected to play an important role in the widespread adoption of electric vehicles and energy storage solutions.
Limitations
India's lack of domestic lithium production and the control over it poses a hurdle. The country must develop lithium-ion battery technology and establish local manufacturing capabilities to meet the projected demand of 70 GWh by 2030. This will require substantial investments exceeding $10 billion in cell manufacturing capacity and raw material refining by 2030.
The lack of charging infrastructures across rural and semi-urban areas indirectly pose a challenge to the battery market, as customers get discouraged from adopting the vehicles (mainly two-wheelers and rickshaws), due to insufficient ports even if the batteries possess better lifelines. According to data, only 50 out of the sanctioned 2,877 charging stations have been installed as of July 01, 2022.
The dependence on imported raw materials, particularly lithium, cobalt, and nickel, makes the supply chain vulnerable to geopolitical tensions and price volatility. To mitigate these risks, India must explore alternative sources of raw materials and invest in the development of domestic mining and refining capabilities. The recent discoveries of lithium reserves in J&K and Rajasthan offer promise for local lithium production, in reducing reliance on imports and strengthening the Indian supply chain.
Environmental concerns
While lithium-ion batteries are more environmentally friendly compared to traditional lead-acid batteries, their production and disposal still pose enormous environmental challenges. The extraction and processing of lithium and other materials can lead to considerable environmental degradation if not managed properly. Additionally, the safe disposal and recycling of lithium-ion batteries are imperative to preventing environmental contamination.
Safety concerns also persist, particularly regarding the risk of battery fires and explosions. Ensuring the highest safety standards in battery manufacturing and handling is paramount to preventing accidents and building consumer trust in EV technology. Manufacturers must invest in robust quality control measures and advanced safety technologies, such as thermal management systems and overcharge protection, to mitigate these risks.
Recycling is another aspect of the lithium-ion battery lifecycle. Developing efficient and environmentally friendly recycling processes is essential to minimise the environmental impact of battery disposal and recover valuable materials for reuse. Companies like Attero Recycling are revolutionising lithium-ion battery recycling in India, using advanced technologies to extract metals like lithium, cobalt, and nickel from used batteries and reintroduce them into the supply chain.
Financial issues
High capital investment required for setting up lithium-ion battery manufacturing facilities is a barrier for many companies. Access to affordable financing and government incentives is key in overcoming this challenge. While the PLI scheme and other government initiatives provide financial support, navigating the complex regulatory landscape can be daunting for businesses.
Regulatory clarity and streamlined approval processes are essential to facilitate the growth of the lithium-ion battery industry. The government must work closely with industry stakeholders to develop clear guidelines and policies that promote innovation while ensuring environmental and safety standards are met. Public-private partnerships and collaborative efforts between government agencies, research institutions, and private companies can help address these challenges and accelerate the development of the lithium-ion battery ecosystem in India.
Recycling and partnerships
India has the potential to lead global urban mining efforts, with the ability to recycle lithium-ion batteries in zero-effluent facilities, recovering over 90% of valuable metals. By 2030, recycling is expected to contribute 80 GWh of capacity, meeting a big portion of the world's lithium needs. The National Mission on Transformative Mobility and NITI Aayog's plan to invest ?400 billion in mega factories by 2030 are expected to reduce dependency on imports and enhance domestic production of lithium-ion batteries.
India is also exploring partnerships with other lithium-producing countries to secure a stable supply of raw materials. Strategic alliances with countries like Australia, Argentina, and Chile, which have abundant lithium reserves, can help India diversify its supply sources and reduce dependency on any single region. These partnerships can also facilitate technology transfer and knowledge sharing, enabling India to adopt best practices in lithium mining and refining.
Innovations and collaborations
The focus on technological innovations is crucial for the growth of the lithium-ion battery industry in India. Companies are investing in advanced battery chemistries such as Lithium Nickel Manganese Cobalt Oxide (NMC), Lithium Iron Phosphate (LFP), and Lithium Manganese Iron Phosphate (LMFP) to enhance battery performance, safety, and cost-effectiveness.
Emerging technologies such as solid-state batteries and silicon anode batteries hold the promise of improving energy density, charging speed, and overall performance of lithium-ion batteries. Research and development efforts in these areas are gaining momentum, with several Indian institutions and companies collaborating on cutting-edge projects. For instance, the Indian Space Research Organisation (ISRO) has developed a high-energy lithium-ion cell technology, which can be transferred to domestic manufacturers for commercial production.
Strategic collaborations and partnerships are also playing a vital role. For instance, Ola Electric's investment in a gigafactory for lithium-ion battery cell production aims to establish a 1.5 GWh cell manufacturing capacity in its initial phase, with plans to expand to 5 GWh. The company is developing advanced 4680 form factor battery cells, which are more energy-dense and efficient than the currently used 2170 form factor.
International collaborations with leading battery manufacturers and technology providers can accelerate the adoption of advanced technologies in India. Companies like Tata Chemicals and Bharat Heavy Electricals Limited (BHEL) are entering into joint ventures and technology licensing agreements with global players to leverage their expertise and establish world-class manufacturing facilities in India. These collaborations can also help Indian companies gain access to global markets and enhance their competitiveness.
Government support
The state’s backing on promoting clean energy and electric mobility is necessary for the growth of the lithium-ion battery industry. Policies and incentives that support research and development, infrastructure development, and domestic manufacturing are crucial to achieving the country’s goals.
The National Electric Mobility Mission Plan (NEMMP) and the FAME scheme provide a comprehensive policy framework to support the adoption of electric vehicles and the development of associated infrastructure. These policies aim to create an environment for the growth of the lithium-ion battery industry by addressing key challenges such as high upfront costs, lack of charging infrastructure, and consumer awareness.
The government is also working on establishing uniform standards for battery performance, safety, and environmental compliance, to ensure the quality and reliability of domestically produced batteries. The Bureau of Indian Standards (BIS) and other regulatory bodies are collaborating with industry stakeholders to develop these standards and facilitate their implementation.
Public-private partnerships and industry collaborations are essential to leveraging the strengths of various stakeholders and achieving the desired outcomes. The Automotive Research Association of India (ARAI) and the Society of Indian Automobile Manufacturers (SIAM) are actively involved in promoting research, innovation, and standardization in the electric mobility sector.
Conclusion
The lithium-ion battery manufacturing industry in India is set to grow rapidly amidst the shift to sustainable battery solutions. While challenges such as infrastructure, supply chain dependencies, and environmental impact need to be addressed, the opportunities for innovation and domestic production are vast. The current investments, technological advancements, and robust government support can help India establish itself as a strong player in the global market.
Sources: Ibef, Astute Analysis, Business Line, Hindustan Times, Swarajya Magazine, Research and Markets
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