‘India must create what it needs when it comes to lithium ion’: Pankaj Sharma, Log9 Materials

With the battery comprising more than 50 percent of the cost of an EV, the prices of lithium-ion cells are the key determiners of how an OEM can price its EV for the end consumer. While there has been a significant drop in the prices of Li-ion over the last decade, India, still is unable to get the maximum benefit, owing to the lack of scale, cautioned Pankaj Sharma, Co-Founder, Log9 Materials.

Speaking at the Autocar Professional InnerCircle in Bengaluru on February 20, Sharma said, “The future certainly looks promising, and while batteries are becoming cheaper, will they get cheaper for India, that depends on several dynamics. While lithium prices have seen a 10x reduction in the last decade, coming from US$ 1,000 per kWh to US$ 100 per kWh in the present day, CATL recently projected prices to further come down to US$ 50 per kWh. Therefore, while these are based on some macro-parameters, are those available to India’s EV market, is the question.”

Sharma explained that globally, cumulative electric vehicle battery production in CY23 was pegged at around 400GWh, of which India comprised only 2GW of this demand. “Therefore, if we are simply a drop in the ocean, we cannot expect the ocean to listen to us. That is the struggle of being lost in the que of preference, demand, and scale,” he said.

“Hence, what we get is something that is very quasi. One must at least have the level of understanding of what proportion of the production capacity is being procured,” Sharma added.

“Furthermore, no two Li-ion cells are the same, and a same batch can have two cells that do not resemble each other in terms of their characteristics. And if one packs them in the same battery pack, it will fail. Therefore, one would not want to procure substandard cells that come out of the start of the line, or at the end of it,” he pointed out.

Sharma cited that it is here when Tesla alone with its 120GWh demand, puts others into a spot. “While we will never be able to show up at the farmer’s market at 4 o'clock in the morning at the current levels, India needs demand, and scale for the situation to improve.”

He said that as a country, we need to solve the problem ourselves, and that is where Log9 Materials’ efforts to indigenise cell manufacturing in India comes to play as the company is locally creating what the domestic market is looking for. “Therefore, India needs to create what it needs, rather than stand last in the queue, and hope to get what it is looking for,” he stated.

Need for indigenous cell manufacturing

Sharma said that while the global cell prices are projected to further come down from US$ 100 per kWh in the present day to around US$ 60-75 over the next 18 months, they might not be able to come down further, as beyond a certain point, “it is a factor of supply chain issues, and quality.”

He explained that EV OEMs are looking for quality cells which prolong degradation, and avoid the battery replacement in a vehicle. “For an OEM to be able to produce a battery which is 30 percent expensive, but still offers around 7 years of usable life, and offers assured cycle life, is more critical than the cell cost itself.  So, what lies in front of us is that while India is moving on its EV journey, there is a technology step-up that will happen in the country,” he added.

“Therefore, we must focus on self-reliance driven by indigenised technology, and if India achieves local cell production in the range of 60-70GWh, it will solve a very big problem,” Sharma pointed out.

“And it is not a hard road, as science is never hard, it only requires policy, intent, and the right people to drive a change. While some subsidies have been taken away from the battery pack, there is a lot of momentum from the PLI schemes. So, India is moving in the right direction, and will solve the challenges in the coming years,” he signed off.

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