Value chain

Innovation + sustainability key to boost local EV value chain says report by Arthur D Little

India is on the cusp of a global transition in the world of mobility. As the country moves forward to keep pace with net zero emissions targets worldwide and its own commitment at COP26, the need to build a robust and localized EV value chain becomes more important.

A well-structured ecosystem can provide a strategic boost in terms of reducing emissions, saving on raw materials and compensating for the loss of jobs in the manufacture of traditional internal combustion engine (ICE) vehicles – making the country greener, smarter and contributing to national productivity.

A new report published by Arthur D Little (ADL), titled “e-Mobility: Cell Manufacturing in India”, states that “indigenous manufacturing of EV batteries will increase the local adoption of EVs and make India a great center of ‘export in the world’. However, the report pointed out that “the nation needs to invest more than $10 billion to boost cell manufacturing and raw material refining just to meet local demand for Li-ion batteries by 2030 and to create a million new jobs”.

“Demand for Li-ion batteries in India will increase from 3 GWh currently to 20 GWh by 2026 and 70 GWh by 2030, 70% of requirements are currently imported from China and Hong Kong, according to the report.

Speaking about the research findings, Prathmesh Chaudhari, Senior Manager, Automotive Practice, ADL India, told Express Mobility: “China is always thinking 50 years ahead and strategically acquired mines in Congo, Indonesia, Australia and in other countries, while India depends on imports, so this is a frightening discovery.

He added that one of the industry’s critical challenges is India’s limited access to key raw materials like lithium, nickel, cobalt and manganese, which account for more than 80% of cell cost. , because the natural reserves of these materials are concentrated in a few countries. “Additionally, India lacks adequate refining capacity for these materials. Thus, localizing the Li-ion battery supply chain is critical to India’s ambition to become self-sufficient and position itself as a global manufacturer and exporter of electric vehicles,” he explained. .

Will the alternatives help

While EV cells are the most critical part of the e-mobility value chain, the Indian EV industry suffers from over-reliance on imports, limited local manufacturing, limited access to raw materials and refining capacities.

Significant investment in R&D, supportive government policies, foreign direct investment inflows and aggressive acquisition of raw material resources in all geographies can help India achieve Li-battery self-sufficiency. ion.

Speaking of alternatives to lithium-ion, such as zinc-gel or sodium-ion batteries, Chaudhari said: “At the moment these alternatives are in the start-up phase, but we need to invest in R&D. Lithium is something that has been around for a long time and has proven itself on a large scale in all countries.

The other options are under development and have yet to be tested on a large scale. If this proves effective, it may be good news for India as it has more access to these resources. “So if that happens, really good, but it will take time. There have been a few OEMs trying to build new technologies, new cell configurations, let’s see how we can reduce the cost of the battery and make it more suitable for the Indian environment,” Chaudhari explained.

The path to follow

The ADL report highlighted that to thrive, Indian battery players should invest in collaborative R&D in advanced cell chemistries like sodium-ion, metal-air and safer, sustainable and cost-effective designs in the Indian context and could be marketed on a large scale. Global partnerships, joint ventures and acquisitions can build capabilities and gain a strong talent advantage.

Improve bilateral relations and investments in countries rich in natural resources of raw materials, incentivize local players, promote sustainable national graphite mining with the easing of strict regulatory restrictions, increase import duties on batteries and batteries, tax subsidies and PLI/incentive for battery manufacturing and recycling, development of SEZs/lithium parks and favorable regulations will accelerate the localization momentum of cell manufacturing.

Although government efforts such as FAME I & II policies and there has been an increase in the number of OEMs and new-age start-ups venturing into battery manufacturing, these may not not be sufficient to meet growing demand.

Moreover, these are not long-term projects that would be sustainable and it is high time we started realizing that. “India, currently, is at a stage where it can become a world leader when it comes to becoming a combination of ‘innovation + sustainability’. Now is the time to go, now is the time to act proactively and lead the world before it is too late and the competition is tough in the global market”, reiterated Barnik Chitran Maitra, Managing Partner and CEO, India and South Asia.