Advanced Chemistry Battery Market Demand in India Expected to Grow to 220 GWh by 2030

Advanced Chemistry Battery Market Demand in India Expected to Grow to 220 GWh by 2030

The Confederation of Indian Industries (CII) has released a report entitled ‘Raw Materials for Battery & Component Manufacturing’. The report delves into the following aspects of the Indian battery and component manufacturing industry-

The Speedbreakers to EV Industry Growth

The report highlights the significant need for localisation of the EV ecosystem in India, as well as an increasing demand for advanced chemistry cell batteries. It states that currently, India lacks a robust battery manufacturing sector owing to multiple reasons including the unavailability of several critical raw materials required for battery production, to deal with this challenge several measures including the Production Linked Incentive scheme for Advanced Chemistry Cell Battery (ACC PLI) and Khanij Bidesh India Limited (KABIL), a joint venture company created by the government to ensure India’s
mineral security, along with several collaboration efforts through public-private partnership has been taken to promote the in-house production of batteries and to help develop battery ecosystem in India.

Several raw minerals such as cobalt, nickel, lithium and copper have a negligible reserve, production, and refining capacity in India. The country, however, has been negotiating with various mineral-rich countries such as Australia, Chile, Bolivia, Argentina etc. to meet its need for these critical resources.

The high initial cost of EVs is a major obstacle for consumers, and the lack of charging infrastructure makes it difficult for them to be used for long distances. The limited performance capabilities of some EVs also make them less appealing to consumers. In addition, lack of domestic battery manufacturing capabilities and supply chain infrastructure for advanced battery technologies is a major obstacle to the “Make in India” campaign, which seeks to increase domestic manufacturing and reduce dependence on imports. Moreover, India’s dependence on imports from China and Taiwan for lithium-ion cells and battery packs poses a significant challenge to the country’s trade deficit. This issue needs to be addressed through targeted investments in research and development, as well as in building domestic supply chains for battery manufacturing.

India Battery Imports

India is one of the leading importers of lithium-ion batteries and their associated components in the world as the country does not have sufficient domestic production capacity to meet the growing demand for advanced chemistry batteries.
According to the Ministry of Commerce and Industry, India imported around $1.8 billion worth of lithium-ion batteries and their components in the financial year 2021-22. Most of these imports were from countries such as China, Hong Kong, South Korea, and Japan.

ACC Battery Demand

The advanced chemistry battery market demand in India is expected to grow from 20 GWh in 2022 to around 220 GWh by 2030 at a compounded annual growth rate of around 50%.

Batteries currently account for 25%–50% of the total cost of an EV depending on range and performance. While battery costs are declining rapidly, the battery will remain a critical component of the EV supply chain and would continue to dictate the future of the adoption of the electric vehicle in India.