Government may float tender soon for mega investments in battery manufacturing

by Sumantra B Barooah 13 Sep 2019

A Northvolt gigafactory in Europe.

In India's quest to realise mass-scale electric mobility, affordability of electric vehicles is a serious hurdle. Therefore, localisation of battery, the single most expensive component in any electric vehicle, is key. It is learnt that the government is targeting to set up a 50 GWh battery manufacturing capacity in India by 2025 or so. The required investment for the same could be to the tune of $50 billion (Rs 354,650 crore).

To attract investments, the government is expected to incentivise investors. Apparently, the incentives will be available to only players who manufacture battery cells. 5GWh is expected to be the minimum required capacity for availing incentives with the minimum energy density of manufactured batteries to be 200Wh/kg and a guaranteed minimum 2,000 charge cycles.

NITI Aayog, the think tank of the central government, is playing a key role in shaping the electric mobility roadmap for India. When asked about the government's plan to promote battery manufacturing in India, Anil Srivastava , Principal Consultant & Mission Director, National Mission on Transformative Mobility & Battery Storage, NITI Aayog, confirmed that the government is going to come out with a tender document. Srivastava believes that India can be at par with China, currently the world's largest electric vehicle market, by 2035 or 2040. And the same for shared mobility too. Speaking at the Intelligent Mobility Summit by Frost & Sullivan in New Delhi on Wednesday, Srivastava also said that globally incentive schemes will go down. That is already being seen in China.

As India embarks on its electric mobility journey, multiple companies may be entering the battery manufacturing business. According to Frost & Sullivan, Gujarat and Telengana are taking the lead as hubs for lithium-ion battery manufacturing. Suzuki-Toshiba-Denso's joint venture is expected to start production next year. Their plan of starting lithium-ion battery manufacturing  in Gujarat by next year. 

Tata Chemicals, a partner to Tata Motors for electric mobility, is also expected to set up a battery manufacturing plant in Gujarat. Three lithium-ion battery manufacturers are expected to set up plants in Telangana, and one in Andhra Pradesh.  Frost & Sullivan predicts India's lithium-ion battery production capacity to be at 10GWh next year and reach 20GWh by 2025. On a lighter note, NITI Aayog's Srivastava challanged Frost & Sullivan for a bet on that. The electric mobility industry perhaps would hope that the government wins!