Amara Raja eyes LFP battery capacity of 4-6 GWh initially

The battery maker recently entered into a partnership with Gotion-InoBat-Batteries to license Gotion’s lithium iron phosphate technology for manufacturing lithium-ion cells at its upcoming Gigafactory in Telangana.

By Kiran Murali calendar 28 Jun 2024 Views icon12532 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Amara Raja eyes LFP battery capacity of 4-6 GWh initially

Having secured a technology partnership with Gotion-InoBat-Batteries (GIB), India’s battery major Amara Raja Energy and Mobility Ltd is looking at lithium iron phosphate (LFP) cell manufacturing capacity of 4-6 GWh in the initial phase at its upcoming Gigafactory.

Last week, the Hyderabad-based company announced that it has signed an agreement with Gotion High-Tech’s subsidiary GIB EnergyX Slovakia to license Gotion’s LFP technology for manufacturing lithium-ion cells in both cylindrical and prismatic form factors.

“While we are working on the final details, our initial capacity for LFP cells could be anywhere around 4-6 GWh to start with. Obviously, we need to firm that up,” Amara Raja’s management told investors in a call on Friday.

Amara Raja is setting up a Rs 9,500-crore Gigafactory for lithium-ion cells and battery packs in Telangana, which will be expanded to a capacity of 16 GWh for cells and 5 GWh for battery packs over the next 10 years. The first phase of the factory, with a capacity of 2 GWh, is expected to be ready by the end of the next financial year.

The management noted that it is yet to finalize the production and capital expenditure plans, as well as the timeline for LFP cell manufacturing. With its LFP cells, Amara Raja will be initially targeting electric vehicles, including three-wheelers and passenger vehicles, while it will look at stationary applications in the later stage.

The company has been in talks with potential customers since last year to get the cells out in the market “We understand the requirements. Now we don’t have an exact timeline for bringing the customers forward. From the customers' point of view, now there is a very credible technology. We are very optimistic,” the management said when asked about the customer engagement for LFP cells.

Amara Raja is completely new to LFP cell manufacturing and the collaboration with GIB is expected to help the company in developing a robust portfolio of LFP cells. The scope of licensing provides Amara Raja with access to LFP cell technology IP, support in establishing the Gigafactory, Gotion’s global supply chain network for critical battery materials and customer technical support for deploying the solutions.

The management did not disclose any financial details of the partnership with Gotion-InoBat-Batteries. “There is a mix of upfront technology fees and a royalty component. But numbers would be inappropriate to comment,” said Vikramadithya Gourineni, executive director of Amara Raja’s New Energy business.

Though lithium-ion batteries based on Nickel Manganese Cobalt (NMC) and LFP chemistries are popular in the electric vehicle industry, LFP batteries are preferred globally, considering their thermal stability, longer life cycle and lower costs. The concerns of comparatively lower density with LFP batteries are being addressed through new technologies and innovations.

Amara Raja has a tie-up with another Chinese company, with which it has jointly developed an NMC-based 2170 cylindrical cell. The Gigafactory will initially start commercial production with NMC cells, which will be mainly for the two-wheelers.

“From the chemistry point of view, we believe LFP will occupy almost 75-80 percent of the overall requirements of the market, while NMC will be a smaller portion. We are planning our capacity also in the same direction,” the company’s Chief Financial Officer Delli Babu said.

Amara Raja's biggest competitor, Exide Industries, also has a partnership with China-based SVOLT Energy Technology, which develops and manufactures lithium-ion batteries and storage solutions for multiple applications. Exide has secured the rights to use and commercialize SVOLT’s technology and know-how for lithium-ion cell manufacturing.

Amara Raja is among the seven bidders for the government’s production-linked incentive (PLI) scheme for 10 GWh Advanced Chemistry Cell (ACC) Manufacturing. ENDS

Also read: Amara Raja shares rally 20% on new LFP cell production tie-up

Also read: Amara Raja to invest around Rs 3,000 crore in 2 years

 

Tags: Amara Raja
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