India Needs Rs 33,750 Cr To Set Up Li-ion Cell, Battery Mfg Plants: CEEW

Lithium is now a crucial element that would  drive the  world towards energy transition in a major way. In a recent study -‘How can India indigenise lithium-ion battery manufacturing?’ released by the Council on Energy, Environment and Water (CEEW) said that India needs investments to the tune of Rs 33,750 crore to achieve the government PLI target of setting up 50 GWh of lithium-ion cell and battery manufacturing plants. The study calculates the material and financial requirements and offers a blueprint for the domestic strategy as India’s demand is expected to increase significantly.

The research body informed that India requires up to 903 GWh of energy storage to decarbonise its mobility and power sectors by 2030, and lithium-ion batteries will meet the majority of this demand.

CEEW, however, noted that at the time of writing the report, the conversion rate was taken as Rs 75 per US dollar.

Lithium is a non-ferrous metal and is one of the key components in electric vehicle batteries. Earlier this month, the government announced that 5.9 million tonnes of lithium reserves were found, for the first time in the country, in the Reasi district of Jammu and Kashmir.

The analysis, as per CEEW, is based on the minimum manufacturing plant capacity (5GWh) allocated under the Production-Linked Incentive (PLI) scheme.

As per Rishabh Jain, Senior Programme Lead, CEEW, for a green future, lithium will be as important as oil and gas are today. It’s in India’s strategic interest to secure not just the mineral, but also set up the required cell and battery manufacturing systems within the country. India’s electric vehicle market is expected to hit annual sales of 1-crore units by 2030, according to the Economic Survey 2022-23.

As per industry estimates, the total EV sales in India stood at 10-lakh units in 2022.

It is expected to  reduce India’s imports in the long-run, and power its grid and EV transition. To boost domestic manufacturing of lithium ion in India. R&D investments should rise and there should be focus on battery cell component manufacturing and reducing material costs. There should be a support  to recycle to reduce the need for new materials, said the study.

To fulfil the overall battery demand, India will need 969-1,452 kilo-tonnes of anode, cathode, and electrolyte material (the components for a battery) between 2022 and 2030. This requires the country to prioritise other energy storage technologies as well, according to the study report.

The CEEW study recommends focusing on the strategic sourcing of critical minerals and pushing for research, development and demonstration in all technologies to retain competitiveness.

At the same time, reducing the cost of manufacturing batteries by innovating and updating manufacturing processes, and making policy changes to lower the cost of cell components are important, it said.

Development and deployment of batteries will have far-reaching impacts on India’s energy transition journey. Currently, India is import-dependent but the government has already started mobilising resources to indigenise battery cell manufacturing, said Dhruv Warrior, Research Analyst.

The study estimates that the share of upstream component manufacturing and material processing can be as high as 61 per cent. India must develop its capabilities to build skills, technology know-how and infrastructure to indigenise this part of the value chain too.