The long read: Battery gigafabs in India

India is set to emerge as a huge battery storage market with the increasing penetration of renewable energy in the grid and the expected surge in the transition towards electric mobility. The nation aims for a renewable energy capacity of 450 GW by 2030. In addition, it has set the national target of achieving 30% of new vehicle sales to be electric by 2030.

Against this backdrop, Kowtham Raj VS, director (New Initiatives) at consulting firm Customised Energy Solutions (CES Limited), expects the Indian battery storage market to reach 190 GWh annually by 2030, taking into account the demand from EVs, power, telecom, and consumer electronics.

Advancing production

Aiming to meet demand through “Make in India” products, the Indian government will outlay INR 18,100 crore (US$2.5 billion) under the production-linked incentive scheme to encourage giga-scale battery storage fabs. The scheme intends to build a cumulative 50 GWh of advanced chemistry cell (ACC) and 5 GWh of “niche” ACC production facilities in India.

Currently, many companies in India are already making battery packs for stationary storage or vehicular application. However, there is negligible investment in ACC manufacturing and value addition, meaning the nation has to meet all of its ACC demand through imports.

Batteries dominate the overall cost of electric vehicles (EVs). By expanding downstream to include lithium-ion cell manufacturing, India has the opportunity to lower battery costs and develop batteries suited to Indian conditions.

According to a CEEW Centre for Energy Finance (CEEW-CEF) report, the battery pack contributes 35-50% of the overall EV cost. Breaking down the battery pack, lithium-ion cells form approximately 60% of that cost. The report said India could bring the cost of lithium-ion cells down by 25–30% through appropriate policy measures.

Cathode chemistries

Li-ion batteries currently dominate EV storage supply. However, the scheme is open to all technologies as the government strives to attract investments in advanced, high-performing cell manufacturing.

In lithium-ion batteries, cathode chemistries include lithium-nickel-manganese-cobalt oxide (NMC), lithium-iron-phosphate (LFP), and, more recently, lithium-nickel-cobalt-aluminum oxide (NCA). India lacks raw lithium, cobalt, and nickel reserves, but has significant reserves of steel, aluminum, copper, graphite, and manganese. Given that, the raw material availability is not much of a concern for India, especially when considering NMC and LFP are the two most commonly used chemistries by volume.

“In NMC cylindrical-type batteries, potential India-based minerals (steel, aluminum, copper, graphite, and manganese) constitute 56% versus 15% of non-Indian minerals (lithium, cobalt, and nickel),” Kowtham explained. “The LFP technology, which is extensively used in three-wheelers and buses in India, does not need critical minerals like cobalt or nickel.”

It is important to note that by itself, lithium or any other metal itself has limited value, the value lies in processing it to develop the battery, he emphasized.

Indian power trading company Manikaran Power Ltd, in collaboration with Australian project developer Neometals, has initiated a lithium refinery feasibility study in India. The proposed lithium refinery will produce lithium hydroxide, critical for the manufacturing of lithium-ion battery cells.

Under the deal, Neometals will supply ore from the Mount Marion mine located in Australia’s west, for processing at the India refinery to produce battery-grade material for electric cars.

“Refining is a start and there are four to eight steps in the value chain before it reaches the battery. Many of them are here. But, they need to fine-tune the products to meet the demands of battery makers. That will only happen if the battery factory comes,” Kowtham said.

Cathode chemistries aside, coal tar derivatives company Epsilon Carbon has announced its foray into lithium-ion battery materials with the commissioning of a facility to produce 5,000 tons of synthetic graphite anode materials annually. The company plans to triple this unit capacity to 15,000 tons during 2021 and further expand to 50,000 tons per annum by 2025.

Cell manufacturing

Major Indian companies venturing into cell manufacturing want to play it safe by not going public with their potential partners or technology considerations. But Mukesh Ambani, the richest person in India, announced Reliance Industries’ foray into giga-scale advanced energy storage manufacturing. Reliance is exploring new and advanced electrochemical technologies that can be used for large-scale grid batteries. It is looking to collaborate with leaders in battery technology to achieve the highest reliability for round-the-clock power through a combination of generation, storage, and grid connectivity.

With this, Reliance is following in the footsteps of Adani Group, which is reportedly actively looking for battery storage manufacturing opportunities.

Much earlier, Tata Chemicals – part of the Tata Group – had committed an investment of INR 4,000 crore ($540 million) to set up a 10 GW lithium-ion battery plant in the Dholera Special Investment Region (DSIR) of Gujarat. It has, however, not revealed its intentions with the PLI Scheme in place.

At the same time, cell technology providers like New York-headquartered C4V are looking for partners to manufacture lithium-ion cells in India. The company plans to set up new manufacturing cell capacity in India, out of which 5 GWh will be set up by 2025 and another 10 GWh by 2030, reaching a total of 50 GWh by 2035.

“C4V owns very unique cathode chemistry called bio-mineralized lithium-mixed-metal-phosphate (BM-LMP). The chemistry doesn’t use nickel and cobalt and is suitable for temperatures up to 65C, which makes it especially suited for India. In terms of energy density, the technology sits between LFP and NMC. It allows about 15% to 18% higher density than LFP, but 10% to 12% lower than NMC. Not having cobalt and nickel allows the company to drive the cost down aggressively,” said Shailesh Upreti, the founder and president of C4V.

Citing other benefits of their technology, Upreti explained, “Nickel and cobalt are expensive and hazardous, mining of these minerals is limited and extensively hazardous (nickel oxide fumes are considered carcinogenic). Omitting the use of nickel and cobalt gives us the leverage to control the price and provide the safest cells in the market.”

Kuldeep Gupta, vice president of strategic partnerships at C4V, revealed that company has an elaborate plan in India to introduce its battery technology in three generations, starting from liquid electrolyte to semi-solid electrolyte and then to solid-state by 2023. The company is looking to target applications ranging from EVs and energy storage to defense applications such as drones and tanks.

C4V has already signed a memorandum of understanding with the Karnataka government, which offered incentives to set up a factory in the state. “We have been in talks with several industry majors for partnership on production, and may go standalone if required,” Kuldeep Gupta said.

EV makers

Jumping on the bandwagon are EV makers that already have their advanced battery chemistries in place. Tesla is contemplating EV manufacturing in India, while its rival, Triton EV – the electric mobility arm of US-based solar panel and battery engineering firm Triton Solar – already plans to produce electric cars along with components such as batteries in India. Triton EV sees India as one of the biggest markets for its EVs outside the United States and will be making all components of its cars for the Indian market in India only.

“We have been a producer of battery cells since 2011. So we have leverage there, everybody else [in the Indian EV market] is buying battery cells from China, bringing these to India, and then assembling them into battery packs. So, of course, the cost, in their case, is going to be much higher than ours, and with us producing it ourselves makes it very easy,” Himanshu B Patel, founder and chief executive officer at Triton EV, told pv magazine.

“We have partners for getting the lithium and cobalt raw materials required for the batteries. That’s how we can get the costs down much lower than what the regular players [have on offer].”

Triton EV uses NMC as well as solid-state batteries in its EVs. Currently, the company has signed a contract with state-owned Bharat Electronics Ltd. (BEL) for the printed circuit boards, but very soon it will start working on battery cell module manufacturing too, said Patel.

Triton EV’s plans aren’t limited to EVs; it also eyes the Indian market of storage for renewable energy too. As for the capacity, “the Pandora’s box is anywhere from 10 kilowatts to a 40-foot shipping container with 10 MW,” said Patel.

Triton EV will make both the EVs and the battery storage at a single location.

Among existing players, the Japanese joint venture Automotive Electronics Power Private Ltd. (AEPPL) will invest INR 37.15 billion (US$ 501 million) in the second phase of its lithium-ion battery production facility at Hansalpur, in Gujarat’s Ahmedabad district. The venture – set up by Suzuki Motor, Toshiba and Denso – will invest in the 2021-25 period, following the first-phase outlay of INR 12.5 billion (US$ 168 million) to finance production lines for battery packs and modules. AEPPL aims to expand plant output to 30 million cells per year by 2025.

Lead-acid battery majors like Amara Raja and Exide have also signaled their lithium battery intentions. Exide Leclanche Energy (Nexcharge), a joint venture between India’s lead-acid battery major Exide and Swiss energy storage solutions company Leclanche, has a 1.5 GWh lithium battery assembly unit in Gujarat. There it manufactures LFP, NMC and LTO chemistry packs customized to different applications like automotive, telecom, UPS, microgrids and grid-level storage. Leclanche is the technology partner in the venture. Nexcharge procures cells from third parties to cater to the requirements of different applications.

“In India mainly LFP cells are used. However, Leclanche doesn’t manufacture LFP cells, they manufacture NMC and LTO. So, for applications requiring LFP and other cells, we have tie-ups with different manufacturers for supplies,” said Ketan Chitnis, vice president-stationary BU at Nexcharge.

As for cell manufacturing, Nexcharge team is currently evaluating the PLI scheme, doing an internal brainstorming about what capacity it should work with and whether it should take a call in terms of going into cell manufacturing at this point of time, said Chitnis.

Recycling ahead

India’s efforts to emerge as a battery factory of the world is showing green shoots. Leading business groups are keen to capitalize on the opportunity in partnership with suitable technology providers. The government’s incentives scheme with a technology-agnostic approach is providing the needed push.

Even as the nation has already started working toward developing mines for the materials it lacks, the government needs to ensure a circular economy for the raw materials to ensure a sustainable supply while lowering the cost of production. The government and the industry’s efforts to recover battery materials through recycling end-of-life batteries will go a long way in strengthening the supply chain.

Fig. 1: EV sales in India under different scenarios, as projected by CEEW-CEF. In the high-adoption scenario, of the total new vehicle sales between fiscal 2021 and fiscal 2030, EVs are set to account for as much as 43%. In the low-adoption scenario, this drops to 23%. Source: CEEW-CEF.