Exide aims to become one of the top 10 producers of global lithium ion batteries

Exide Industries, India's largest battery player is making a quick shift to lithium-ion batteries and the company’s Managing Director and Chief Executive Officer Subir Chakraborty expects the company to break into the ranks of the top 10 lithium-ion battery producers in the world in the coming decade. With an investment of Rs 6,000 crore lined up, the Kolkata-based lead acid battery expert plans to set up a 12 giga watt per hour of capacity in the coming decade.

A fast-growing market and the active interest from several OEMs gives enough confidence to Chakraborty to make this shift. Exide Industries’ numbers for this quarter are mixed. 

In the quarter ended September, Exide Industries’ consolidated net profit jumped 22.7 percent YoY to Rs 241.20 crore. The company saw a 13.3 percent YoY increase in net sales to Rs 3,841.13 crore on the back of uptick in volumes and pricing strategies across verticals.

EBITDA fell slightly to Rs 412 crore during the period under review compared to Rs 413 crore in the same period a year ago as high input costs continue to impact profits on a year on year basis. EBITDA margin increased to 11.1 percent in Q2FY23 compared with 9.9 percent in Q1FY23. 

The company, however, lost out on the Production Linked Incentive (PLI) scheme as it failed to meet the eligibility criteria under the Request for Proposal (RFP). It was among the 10 companies that submitted their bids under the Advanced Chemistry Cell (ACC) Battery Storage Programme in India, released by the Ministry of Heavy Industries on October 22, 2021.

Chakraborty said the company management is receiving strong interest from its legacy automotive customers for the shift to lithium-ion batteries.  

“I think we will be one of the first players to kick-start a multi-gigawatt/hr facility in the country. Once fully-functional, we will be generating as much as the top 10 global lithium-ion battery producers. This has generated a huge amount of interest amongst all the OEMs. With our 75 years of experience in the lead-acid domain, we have already started to do a reach out exercise with potential customers who are well known to us,” Chakraborty told analysts. Exide Industries has finalised an 80-acre land at the Hi-Tech Defense & Aerospace park Phase 2, Bengaluru to set up the said turnkey plant.

He further said that the company wants to establish a first-mover advantage as it will be the first player with a multi GWh capacity plant in the country. “It takes 1-1.5 years to homologate any product with the customer. With our vast experience in battery space, I do believe that Exide has that head start. So for us, the first mover advantage is immense,” Chakraborty added. 

The first phase of the said plant will entail a capex of Rs 4,000 crore and will commence its operation by the second half of FY25. The management expects the production to stabilise by FY26. The remaining Rs 2,000 crore will be spent on completion of Phase 2. 

In December 2021, Exide Industries entered into a technical collaboration with the China-based high-tech lithium-ion producing company SVOLT. As part of the agreement, SVOLT will grant Exide an irrevocable right and license to use, exploit and commercialise necessary technology and know-how owned by it for lithium-ion cell manufacturing in India.  

The company is also planning to leverage its know-how to make battery management systems (BMS), packs and modules through its subsidiary — Nexcharge, which is a joint venture between Exide Industries and Leclanche SA, in Gujarat. This is one of the largest facilities in the country for the production of lithium-ion battery packs and modules and has six fully automated manufacturing lines and test labs. At present, Nexcharge has an order book of above Rs 260 crore to be executed over 18 months across the industrial and automotive segments.