According to a new analysis by JMK Research and The Institute for Energy Economics and Financial Analysis, Indian lithium battery market would increase to 116 GWh in FY2029-30 from just 2.6 GWh in FY2020-21, with electric vehicles (EVs) accounting for 90% of the overall industry (IEEFA).
According to the analysis, yearly lithium-ion battery demand for automotive applications would rise from 2.3 GWh in FY2020-21 to 104 GWh by FY2029-30, thanks to government programs such as FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) and different state-level EV policies. Telecom towers, data centers, grid-scale renewable energy (RE) integration, and rooftop solar are expected to drive up demand for lithium batteries in non-automotive applications from 0.3 GWh to 12 GWh.
According to the report, India’s government’s target of 30 percent electric vehicle sales by 2030, as well as the Central Electricity Authority’s estimate of 34 GW/136 GWh of battery storage needed to add 450GW of renewables in India by 2030, will propel the country to become a major lithium battery consumer.
The paper recommends increasing lithium battery production in India due to the large anticipated demand.
For many years, India has been producing battery packs. Lithium cell production on a commercial scale, on the other hand, has yet to begin. As a result, the country relies on imports to meet its cell needs.
Several compelling factors for cell production in India are highlighted in the paper. It claims that, as of 2020, India had the lowest cell production costs (US$92.8/kWh) when compared to the United States, European nations, and even China (US$98.2/kWh) and South Korea (US$98.1/kWh). Similarly, India offers significant cost savings in terms of labor and power (India’s gross monthly minimum salary in 2019 was US$65, compared to US$217 in China). Falling battery prices, as well as measures such as the FAME scheme, are increasing EV adoption in India.
The report says “for now, India is likely to import all the raw materials required for cell manufacturing but can lower this dependency by entering into long-term contracts with raw material suppliers or acquiring some assets in mineral-rich nations. Local capabilities are also slated to be built up gradually.”
According to the paper, hurdles to cell production in India include a lack of essential raw materials, the need for large investments, and a lack of technological know-how. Battery recycling is suggested as an alternative way to address rising LiB demand. It will result in the recovery of 90% of lithium, cobalt, nickel, manganese, and graphite, according to the research, and will set India on the path to a circular economy.
“Overall, however, as India already has huge cost advantages in battery assembly and software-driven BMS capabilities, it can also realize significant benefits through a vertically integrated value chain once lithium-ion cell manufacturing booms. For cell manufacturing and battery pack assembly, the future looks promising in India provided issues like battery standardization and battery safety issues are addressed and the industry and government work in sync,” the report concludes.
At Inverted Energy we manufacture Lithium Battery for Power Storage and Mobility