Li-ion Phosphate or Nickel Manganese Cobalt Oxide- Which Has More Potential?

Highlights :

  • The 30 GWh manufacturing target from the PLI scheme will leave India short of the projected demand of 145–158 GWh, but companies are now investing themselves in the gigafactories says the report.
Li-ion Phosphate or Nickel Manganese Cobalt Oxide- Which Has More Potential? China Ahead Of US, EU In Battery Recycling To Meet Lithium Demand: Report

A report by the International Institute of Sustainable Development (IISD) titled ‘India’s Potential in the Midstream of Battery Production’ had shed light on the role of different technologies of batteries like Lithium-ion in the transition of automobile fuel. The report aims at mapping the EV adoption in India.

The report says that the EV adoption composes 80% two-wheeler and three-wheeler vehicles. The report cites a study by NITI Aayog and Rocky Mountain Institute, 2019, to indicate that 70% of commercial cars, 40% of buses, and 30% of private cars sales will be electric by 2030. 

Market Share of EV Batteries 

The report states that India can become a part of the battery supply chain through its production of battery cells and the role of mineral processing units in adding. The two most common batteries are lithium-ion batteries which are lithium iron phosphate (LFP) and nickel manganese cobalt oxide (NMC). The report suggests that NMC batteries, with 60% of the market share, are the most popular version of lithium-ion batteries. In this segment, China is a leading country with 95% for LFP (Lithium Iron Phosphate) for both battery chemistries, especially in LFP batteries. After the end of the LFP patent regulation in 2022, the non-Chinese companies have gained the upper hand, the report adds.

Among the two batteries, the NMC has higher density, longer runtime, and a longer cycle, than LFP, as per the report. The cost of NMC batteries is decreasing with technological development, and low temperatures can make them useful for multiple applications, the report states.

The report sheds light on the use of chemicals such as LFP (Lithium Iron Phosphate), which has a longer life than NMC (Nickel Manganese Cobalt Oxide). This, the report says, is due to a wider market share of 60% whereas, lithium batteries amount to 30% of the market share. In this, China has a wider market hold as it has a share of 95% of the LFP market.

Domestic EV Adoption & Li-ion 

The report indicates that India is pushing for stronger domestic EV adoption and is looking to achieve its target of 30% EV market share. The number of batteries EVs sold in India has almost quadrupled in 2022, compared to 2021.

The number of battery EVs sold in India almost quadrupled in 2022, compared to 2021. At the same time, the 
electric car sales in Q1 of 2023 doubled when compared to the same period of 2022.

The report suggests that Tata Motors, a leading Indian automotive manufacturer, accounted for more than 85% of the total 50,000 battery EVs sold. The current rise of India’s battery supply chain is due in no small part to the government’s Production Linked Incentive (PLI) scheme, which supports the production of 50 gigawatt-hour (GWh) battery cells by 2026 to reach its 2030 EV ambition.

The study mentions a report by the Council on Energy, Environment and Water [CEEW] , as per which India’s 2030 EV target translates into total sales of more than 100 million EVs, and around an annual 145–158 GWh of battery demand by 2030. The 30 GWh manufacturing target from the PLI scheme will leave India short of the projected demand of 145–158 GWh, but companies are now investing themselves in the gigafactories says the report. With this, India is seeing a quick uptake in EV adoption in the smaller and shared mobility sector.

The biggest revenue comes from Ola Electric in the EV sector, the study highlights. The firm aims to double its electric two-wheeler manufacturing capacity to 2 million vehicles by the end of 2023 and to 10 million vehicles by 2028. Additionally, the Tata Group recently announced setting up a gigafactory of 20 GWh, with an initial investment of around USD 1.6 billion.

The Roadblocks

While the report adds that India is emerging as a prominent player in the battery industry largely due to the government’s focus on cell manufacturing through the PLI-ACC framework, it also indicates the challenges. It informs that the true value lies in capturing the entire supply chain, particularly in cathode material manufacturing, where minerals represent a critical cost component. Hence, there is a strategic imperative to develop mineral processing capabilities.

While the PLI-ACC framework includes local content requirements, many companies argue that further support is needed to localize other aspects of the manufacturing supply chain, including mineral processing,
cathodes, and anodes.

India has the potential to add value across the battery supply chain beyond gigafactories. The country’s chemical sector expertise, favourable trade relations with key players such as South Korea, Japan, the United States, and the EU, and a growing network of free trade agreements offer opportunities for upstreaming processing. Furthermore, the report concludes that India possesses critical minerals such as manganese ore, graphite, and recently discovered lithium, providing a strong foundation for local supply and reduced dependence on imports.

In a recent development, the Union Minister of Mines and Coal Pralhad Joshi, in his recent reply made before the Lok Sabha, said that India has already made successful attempts to extract Lithium from the mineral concentrate on a laboratory scale. He also said that the country was able to develop technologies to utilize the Lithium sources present in the country.

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