India’s market for EV batteries alone could be worth as much as $300 billion from 2017 to 2030, to account for over 1/3rd of the global market :NITI Aayog &Rocky Mountain Institute

India’s market for EV batteries alone could be worth as much as $300 billion from 2017 to 2030, to account for over 1/3rd of the global market :NITI Aayog &Rocky Mountain Institute 

Sanjay Jog

By 2030, India could account for more than one-third of the global market for batteries for electric vehicles if the country meets its goals for a rapid transition to shared, connected, and electric mobility. India’s market for EV batteries alone could be worth as much as $300 billion from 2017 to 2030.

While India is starting from a relatively weak position in battery manufacturing globally, the scale of its market opportunity is attracting strong interest from leading companies in India and globally. Battery production in India could ramp quickly if manufacturers have confidence in future market growth. These are the major findings of the report ‘’INDIA’S ENERGY STORAGE MISSION:A Make-in-India Opportunity for Globally Competitive Battery Manufacturing’’ prepared jointly by NITI Aayog and Rocky Mountain Institute.

Domestic manufacturing of Lithium-ion batteries, currently an electric vehicle’s most expensive component, presents an enormous economic opportunity for India. Making batteries for electric vehicles in India can support automakers’ efforts to produce an attractive fleet of clean vehicles at prices that Indian consumers can afford. India can become a net exporter of batteries, thereby enabling other countries’ transitions to electric mobility and renewable energy.

In line with its aspiration to achieve 100 percent electric vehicle (EV) sales by 2030, India can rise among the top countries in the world in manufacturing batteries. To do so, however, will require a strategy designed to overcome India’s relatively weak initial position in battery manufacturing while claiming an increasing share of total battery value over time.

Since the battery today accounts for about one-third of the total purchase price of an EV, driving down battery costs through rapidly scaling production and standardizing battery components could be a key element of long-term success for India’s automotive sector. India’s EV mission could drive down global better prices by as much as 16 percent to $60 per KWh. Given the projected scale of its domestic market, India could support global-scale manufacturing facilities and eventually become an export hub for battery production.

Analysis by NITI Aayog and Rocky Mountain Institute (RMI) indicates that domestic battery manufacturing to supply the transition to EVs is an important market opportunity for the Indian economy. It would bring economic and social benefits from reduced oil imports, improved public health, and increased integration of renewable energy supplies into the electric grid. This analysis estimates that 25–40 percent of the total economic opportunity represented by battery manufacturing for India’s EV ambitions can be captured in India even under the least favorable scenario, where India imports all lithium-ion cells and assembles these cells into battery packs. As India’s battery manufacturing capabilities mature and supply chains are established, India will have the opportunity to produce both battery cells and packs, while importing only the cathode or its raw materials from mineral-rich regions. In this scenario, India stands to capture nearly 80 percent of the total economic opportunity.

According to the analysis, clear and stable policies to guide India’s transition to EVs are fundamental to support investment in vehicle and battery manufacturing capacity in India. Coordination among industry stakeholders and government can help to define a pathway to growth and competitiveness by establishing a shared technology roadmap, creating common standards, and aligning policies.

NITI Aayog and RMI recommend that India create a consortium of battery manufacturers, OEMs, government officials, and subject experts to inform and coordinate the deployment of capital and intellectual resources and advance to a position of global leadership in battery manufacturing.

The government will play a key role in catalyzing, convening, and driving this consortium. The government’s active engagement will not just infuse urgency and purpose; it will create an opportunity for open dialogue on the policies around battery manufacturing and technology development.

The consortium could include key global battery R&D and manufacturing partners to bring India up to speed with global innovations, avoid past failures, and invest resources in areas that can help India build competitive advantage in battery manufacturing.

This consortium will help key stakeholders coordinate and collaborate on a technological pathway for battery manufacturing in India. By focusing on joint R&D on long-term, high-risk opportunities, the consortium will support continuous innovation across the whole supply chain.

While the agenda and the role of the consortium should be flexible to ensure that consortium members see sustained value in the face of evolving market needs and challenges, some initial objectives of such a consortium could include:a. Developing a common technological roadmap for the battery manufacturing industry b. Coordinating R&D on new and advanced battery technologies, including those that

leverage innovative manufacturing technologies and alternative chemistries c. Driving adoption of domestically manufactured batteries in multiple additional use cases and d. Conducting advanced research on battery reuse and recycling to reduce need for imported minerals.

This consortium approach can also be extended to the vehicle design and manufacturing process,as an increasing number of vehicles will be utilized for service provision as opposed to personal ownership in the future. In such a future, many common parts will be indistinguishable to the end- user customer/rider, and many vehicles could share common components. Common design and manufacturing of such parts could further reduce overall manufacturing and design costs and improve delivered quality.

Start-up incentives can be used to de-risk early stage investments in battery manufacturing and accelerate the development of India’s domestic battery manufacturing industry. These incentives could include land grants, tax incentives, streamlined permitting, encouraging foreign investment, direct subsidies, and R&D support.

Scaling of battery production can be supported through supply chain coordination and de- bottlenecking, infrastructure development, and end-to-end planning and coordination.