In recent years, India’s electric vehicle (EV) industry has witnessed a significant surge in momentum, fueled by a global shift towards sustainable transportation solutions. Central to the success and sustainability of this sector is the growth of the EV battery industry and EV battery, a critical component that directly impacts the performance, range, and overall viability of electric vehicles. As the nation strives to address environmental concerns, reduce dependency on conventional fuel sources, and embrace a cleaner, greener future, the EV battery industry has emerged as a focal point for innovation and investment. However, this growth is not without its set of challenges, ranging from technological hurdles to infrastructural limitations. Against this backdrop, various government initiatives play a pivotal role in shaping the trajectory of India’s EV battery sector, steering the nation towards a more sustainable and electrified future. This blog focuses on the dynamic landscape of India’s EV battery industry, exploring its growth trajectory, the challenges it confronts, and the strategic initiatives undertaken by the government to propel this transformative journey.

Factors Driving the Demand for Batteries in India

The increasing demand for electric vehicles across passenger and commercial segments is one of the primary factors that is responsible for driving demand for batteries in India. Homes are also becoming smarter and using different types of electronic devices to complete routine tasks. The usage of electronic devices at home has increased the demand for the required power supply and the existing capacity of grid supply is not enough to meet this demand. Shortage of the required grid supply also proves an important driving factor for increasing demand for batteries. Besides, Central and State Govts. are continuously taking big initiatives to accelerate rapid urbanization and industrialization to contribute to the economy which leads to increased demand for electricity. Batteries, especially in the form of backup power solutions, in rural areas with limited or unreliable access to the electricity grid, and urban, and industrial settings, are essential to ensure uninterrupted power supply. Batteries prove good off-grid solutions when grid supply is not available. The telecommunication infrastructure is another domain that essentially requires high-capacity batteries to ensure smooth connectivity in remote areas. The power sector currently produces insufficient energy and it requires huge improvement to successfully overcome the considerable issues of unstable power infrastructure. High capacity Energy Storage Solutions appear to be a feasible amenity to bring positive change in the energy sector but they also need batteries to keep ESS functioning and deliver expected results. Above-listed factors are significantly driving the demand for batteries in India.

Opportunities and Challenges 

The adoption of EVs is continuously increasing and electric vehicles are penetrating the market with higher sales. They require lithium-ion batteries in huge amounts. Consistently growing sales of EVs also increase the demand for lithium-ion batteries because they are the main components in electric vehicles. These numbers will increase more in the coming years to touch new limits. Lithium-ion batteries also help as an emergency power backup system at home, workplace, and C&I. These batteries additionally play a key role in increasing the capacity of the power backup system and provide enlarged backup time. These consistently growing demands provide huge opportunities for all lithium-ion battery manufacturers. When combined with meticulous planning and feasible strategies lithium-ion battery manufacturers can reap great benefits from this opportunity to lead in the market. This is undoubtedly a golden opportunity to grow in terms of revenue and growth, however, there are some significant challenges as well which prove big constraints to meet the targets and require urgent attention. The battery manufacturing sector is very big, not only in India but across the world, and is currently incapable of meeting the constantly increasing demands in the market. The shortage of key raw materials like lithium, cobalt, etc. is the main reason behind the limited manufacturing of batteries. Importing these raw materials from foreign countries is the only feasible solution to overcome this shortage with China being reportedly the biggest supplier of lithium, cobalt, and other raw materials. Expensive import, and stipulated rules & regulations are other challenges in the way of manufacturing lithium batteries in the required quantity and ensuring smooth supply to the end-user. Mineral Exploration Corporation Limited (MECL) however has found some lithium reserves in India at J&K and Rajasthan locations but exploration and processing of lithium is still a work in progress and require some time. Expensive manufacturing techniques, the fragile ecosystem around the reserves, and other important environmental challenges act as a barrier to moving further. In these scenarios, effective government policies become imperative in order to enable the start of lithium mining to ensure easy availability of raw lithium at a reduced price and cut dependency on foreign exports.

Government’s Initiatives in Creating a Sustainable EV Battery Ecosystem 

Over the last few years, the government has introduced policies, and regulatory support along with the required framework for the development of the amicable EV ecosystem in the country. FAME II scheme delivered good results in the last few years and now the ACC (Advanced Chemistry Cell) PLI scheme is expected to help the nation save millions against the import of crude oil and enhance the share of renewable energy at the national grid level. This government initiative also emphasizes optimizing domestic value addition and making India globally competitive as far as battery manufacturing capabilities are concerned. As per the guidelines of the ACC PLI program, manufacturers essentially have to set up the manufacturing facility within a period of a maximum of two years after getting the approval and the applicable incentives will be disbursed later after continuously selling batteries that are manufactured indigenously. The disbursal time may span up to a period of over five years or even more. These guidelines clearly demonstrate the government’s determination to create a world-class EV ecosystem in the country as soon as possible. The provision of disbursing incentives on the basis of continuous selling of batteries will also give confidence to manufacturers to successfully run their battery manufacturing units for a long time and receive government support to escape all roadblocks.

Way Ahead

Servotech is already a renowned brand in the EV charger manufacturing industry and has secured a respected place in the list of most competent manufacturers. In order to enhance our manufacturing capabilities, we have established our subsidiary Techbec Green Energy Private Limited. We have also signed an MoU with GoUP, in line with Uttar Pradesh Electric Vehicle Manufacturing and Mobility Policy 2022, to set up an EV charger manufacturing unit. This upcoming plant is a 300 cr. investment and will be partially operational in the first quarter of 2025 and will have the annual capacity of manufacturing around 10,000 EV chargers. This plant will additionally create over 500 jobs. Servotech expects to touch the revenue targets of 2,000-3,000 cr in coming years while supporting & strengthening indigenous manufacturing and securing a place among the top 3 EV charger manufacturers and will construct its new plant in Uttar Pradesh in a campus-inspired style as well as will maintain a state-of-the-art infrastructure along with a world-class R&D facility equipped with the latest machinery and amenities. Servotech maintains a progressive approach and consistently works with big expansion plans for future growth. Since beginning in 2004, the company has registered exponential growth in the last two decades. During this long & successful journey, we have offered an extensive range of products including AC&DC EV chargers and more.

Authored By
Mr. Raman Bhatia, Founder &  Managing Director
Servotech Power Systems Ltd.

This article was originally published in Industrial Products Finder

The pressing need to develop a robust Indian battery ecosystem is tangible evidence of a desire to improve our environment. simultaneously, create a more sustainable environment. Demand for batteries is increasing, driven largely by the need to reduce climate change through the electrification of mobility and broader energy transition. Using batteries can prove to be extremely beneficial since they can reduce greenhouse gas emissions and environmental pollution. Batteries can help integrate more clean energy into the grid, displacing fossil fuels and reducing carbon footprint as well as reducing the need for building new power plants or transmission lines, saving land, water, and resources.

The Indian battery market, over the years, has witnessed significant growth and transformation and will continue to develop in the upcoming years. According to the latest reports, India’s battery market is estimated to be at USD 16.77 billion by the end of this year and is projected to reach USD 27.70 billion in the next five years, registering a CAGR of over 10.56% during the forecast period. This change in the dynamics of the Indian Battery Market is due to factors like increasing demand for electric vehicles, renewable energy integration, and a strong need for reliable power backup solutions. Apart from this, the government has also launched its production-linked incentive (PLI) scheme for the production of 30 GWh of advanced chemistry cell(ACC) batteries. Furthermore, the ministry has awarded an additional 20 GWh capacity, with a target to achieve 50 GWh ACC production capacity by 2030. A core feature of the scheme is its unwavering commitment to domestic value addition. Steps like these reinforce India’s commitment to building a robust and sustainable Indian Battery Landscape.

Rise of Lithium-ion Battery in the Indian Battery Landscape

Demand for lithium-ion batteries is expected to escalate over the next decade and this is majorly due to these factors. Firstly, there has been a swift but fast transition towards the need to cultivate a greener environment. There has been a regulatory shift towards sustainability which includes new net zero targets and guidelines. The second reason is the increasing awareness of greener solutions and technologies among the masses. The generation of modern times is becoming more and more environment-conscious. This transformed consciousness has resulted in greater customer adoption rates as well as increased consumer demand for greener technologies. Lastly, the government has made a remarkable contribution by introducing policies and incentives. These government-introduced policies and incentives have contributed tremendously towards the growth of India’s battery ecosystem.

Atmanirbhar Bharat and Lithium-ion Battery

India’s journey to energy security will be powered by the creation of an ‘Atmanirbhar’ battery ecosystem. Lithium-ion batteries (LIBs) are currently the dominant technology for electric vehicles (EVs) in India and globally. The government has been promoting the production of lithium-ion batteries in India to power the dream of Atmanirbhar Bharat.

India produces 81 percent of lithium-ion batteries for electric vehicles in the country. They are also fast emerging as the preferred choice for battery energy storage systems (BESS) for large-scale penetration of renewable energy sources such as solar and wind.

Lithium-ion batteries are widely considered one of the life-changing technological advancements due to their ability to create a significant impact on various industries and modern life. Lithium-ion batteries have revolutionized the automotive industry by serving as the primary source for electric cars. They offer high energy density, quick charging capabilities, and a longer lifespan as compared to other battery technologies which has advanced the transition towards sustainable transportation. Lithium-ion batteries enhance grid stability and reliability. They manage to provide power during peak demand, prevent power outrages, and smooth out fluctuations in electricity supply, which is imperative to maintaining a stable and resilient electrical grid. In this era where there is a shift towards sustainable energy, lithium-ion batteries contribute to increased energy efficiency across various industries. They enable energy storage and management solutions that reduce waste and optimize the use of electricity. Lithium-ion batteries help reduce greenhouse gas emissions and decrease the reliance on fossil fuels, playing a key role in a cleaner and greener future. Ongoing research and development into improving lithium-ion battery technology have led to further innovations in energy density, safety, and cost reduction by lithium-ion battery manufacturers. As technology continues to grow multiplefold, lithium-ion batteries are likely to become an indispensable part of the process of shaping our future.

Providing Alternatives; Emergence of Solid State Batteries, Zinc Batteries,

Battery demand is growing and so is the need for the creation of alternatives to lithium-ion batteries along the value chain.

Lithium reserves are limited and almost 60 percent of today’s lithium is mined for battery-related applications, a figure that could reach 95 percent by 2030. Lithium reserves are well distributed and theoretically sufficient to cover battery demand, but high-grade deposits are mainly limited to Argentina, Australia, Chile, and China. With technological shifts toward more lithium-heavy batteries, lithium mining will need to increase significantly. In order to prevent the over-exhaustion of lithium resources, ultimately, leading to a complete stoppage of lithium-ion batteries production. It becomes important to develop alternatives to lithium-ion batteries and there have been developments in this direction.

One of the significant steps taken in this direction is the invention of solid-state batteries. Solid-state batteries are a type of rechargeable battery that uses solid electrolytes. These batteries have garnered significant attention due to their potential to offer several advantages over conventional batteries. These batteries with their solid electrolyte, are expected to provide greater safety and performance.  Solid-state batteries just like lithium-ion batteries reduce the carbon footprint of an electric car battery. Solid-state batteries also can reduce the climatic impact of batteries significantly. They are compact and possess a high energy density as well. Another noteworthy development is the introduction of zinc batteries. They refer to a category of batteries that use zinc as one of the primary components, typically as the anode. Zinc batteries are yet to reach the Indian market.  This innovative and promising battery is cost-effective and offers good performance, enhanced safety features, and long lifespans.

Promoting Sustainability through Recycling of Lithium-ion Battery

Recycling of lithium-ion batteries can prove to be a good solution for maintaining the sustainable battery ecosystem that is being cultivated apart from making use of alternative battery technology because alternative battery technology like zinc batteries will take time to reach the Indian market. Recycling of lithium-ion batteries aims at recovering valuable material and reducing environmental impact and many lithium-ion battery companies are doing the same.Recycling these batteries helps recover valuable metals like lithium, cobalt, nickel, and manganese while minimizing the environmental footprint associated with battery production and disposal. The process of recycling involves collection, sorting, dismantling, crushing, and shredding of the battery. Lithium-ion battery recycling not only conserves valuable resources but also reduces the environmental impact associated with mining and processing raw materials. It also helps mitigate the risk of environmental pollution. Many countries including India have established regulations and incentives to promote lithium-ion battery recycling as it plays a crucial role in the sustainability of electric vehicles and the transition to cleaner energy sources.

Path forward.

In conclusion, the development of a robust Indian battery ecosystem is not only a pressing need but also a critical step towards improving the environment and creating a more sustainable future. The demand for batteries, particularly lithium-ion batteries, is on the rise due to the imperative to combat climate change through electrification and the broader transition to cleaner energy sources. Several factors are driving the demand for lithium-ion batteries, including a global shift towards sustainability, increased awareness of greener technologies, and government policies and incentives. India’s journey towards energy security hinges on the development of an ‘Aatmanirbhar‘ battery ecosystem, with lithium-ion batteries currently playing a pivotal role.

Lithium-ion batteries have revolutionized multiple industries, offering high energy density, quick charging, and longer lifespans. They enhance grid stability, reduce greenhouse gas emissions, and contribute to a cleaner and greener future. Research and development efforts continue to improve battery technology, ensuring their continued importance in shaping the future.

However, as demand for lithium-ion batteries grows, concerns about the limited availability of lithium reserves emerge. To prevent overexhaustion of these resources, alternative battery technologies like solid-state and zinc batteries are being explored.

In addition to exploring alternative technologies, recycling lithium-ion batteries is essential for maintaining a sustainable battery ecosystem. Recycling helps recover valuable materials like lithium, cobalt, nickel, and manganese while reducing the environmental impact associated with battery production and disposal. Many countries, including India, are implementing regulations and incentives to promote battery recycling as a crucial step in the transition to cleaner energy sources.

India’s journey towards a sustainable and environmentally friendly future heavily relies on the development of a robust battery ecosystem. This ecosystem must address challenges, embrace alternative technologies, and prioritize recycling to ensure a cleaner and greener environment for generations to come.

Authored By
Mr. Raman Bhatia, Founder &  Managing Director
Servotech Power Systems Ltd.

This article is originally published in Emobility+ Magazine