Amara Raja Accelerates BESS Plans; Says India Cannot Leapfrog Directly to EV

Amara Raja Energy & Mobility is accelerating investments in battery energy storage systems (BESS) as rising renewable energy capacity and grid storage requirements drive stronger demand for stationary applications, even as the company continues to bet on long-term electric vehicle growth.

The battery maker is recalibrating its near-term strategy to give a larger role to energy storage systems instead of focusing largely on electric mobility, Amara Raja’s management told investors on Tuesday after announcing the company’s FY26 results.

“A major change in our strategy is the introduction of BESS as a larger part of our mix. Earlier, we had largely focused on EVs, and we expected that the larger part of even the short-term growth would come in EVs,” the management said.

The company noted that growth in renewable energy, data centres, telecom infrastructure and grid balancing requirements is creating faster-than-expected demand for stationary battery storage.

“While EV momentum remains steady, and in the long term, we do still believe it'll present a larger opportunity, the fact that BESS has accelerated,” the management said.

Amara Raja has launched an accelerated project to build an ESS integration facility at Divitipalli in Telangana. “As a result, we've launched an accelerated project to construct an integration facility, ESS integration facility in Divitipalli,” they said.

“We're aiming to start production at the end of this calendar year with an initial capacity in a facility with the ultimate capacity of 10 gigawatt hour.”

The company expects stationary storage to contribute more strongly to demand in the near term. “The mix in the short term is definitely leaning more towards stationary storage,” they said.

Amara Raja had earlier projected that electric mobility would account for nearly 80% of future battery demand. It now expects storage applications to take a larger share of the mix.

“Earlier, our projections are more about like 80% coming from EV in long-term, 20% from BESS. I think long-term, well, EV will still be the larger component. Today, we believe it is going to look something more like two-thirds, one-third,” the management said.

Meanwhile, the company continues its work on its lithium-ion manufacturing projects in Telangana. The first phase of the giga cell factory at Divitipalli with 2 GWh capacity is expected to commence operations in the second quarter of calendar year 2027, while the overall facility is planned to reach 16 GWh by financial year 2030.

Through its wholly owned subsidiary, Amara Raja Advanced Cell Technologies (ARACT), the company is also establishing a 5GWh BESS gigafactory for grid-scale as well as commercial and industrial applications. This is coming at an estimated capex of Rs 280 crore and commercial production is targeted in the Jan-Mar quarter. 

The company has also established battery pack assembly plants for mobility and stationary applications. Its BESS stationary storage assembly facility at Tirupati currently has around 1.2 GWh capacity.

Amara Raja said India’s transition to electric mobility would be gradual because the country still lacks localised supply chains for key battery materials.

“We cannot necessarily leapfrog into EV the way that some think tanks are expecting us to, because we cannot replace the import of oil with import of other raw materials,” they said.

“At a time when we are trying to get the EV ecosystem, and when the first self-manufacturing plant is getting off the ground in India, we do not have material and lithium that is localised in India.”

The management said hybrid technologies would continue to play an important role during the transition phase. “We think we believe that this is the time where hybrids have to be accelerated in India.”