Lithium-ion battery technology is at the heart of India’s EV Future
Published On 11 May 2021 04:22 PMNew Delhi: The government of India’s determined push to Electric Vehicle adoption is not any coincidence.
New Delhi: The government of India’s determined push to Electric Vehicle adoption is not any coincidence. It is a calculated decision supported by numerous strategic incentives to accelerate electrification.
The government understands the importance of electrification and India’s domestic manufacturing opportunity during this global transition. These strategic initiatives are now gaining momentum as the overall EV narrative emerges. But there still are many challenges to overcome on the path towards a cleaner future.
The primary challenges remain cost and the overarching focus on the vehicle. EV sales are improving exponentially every year and they will continue to do so. Certainly there are performance, maintenance and noise benefits with EVs compared to petrol. But sales are improving largely because of decreasing battery costs combined with improving capabilities.
Emerging companies all over the world have demonstrated they can enter the EV industry with vehicle product offerings. The vehicle itself, whether 2W or 3W for example, is not the primary challenge in the long-run. Global auto incumbents have been developing EVs for years without significant success. But the primary challenge is battery technology and the battery supply chain.
Countries such as China and companies such as Tesla understood this well before others. And their inherent advantages and electrification lead remain underappreciated. They understand the long-term advantage is through battery technology and the battery supply chain.
EVs can’t exist without batteries and batteries require technology, access to cells and access to raw materials. Whether it is a country or a company, the path to EVs is through the battery and the battery supply chain. Union minister Nitin Gadkari is confident of India's potential to become a major manufacturing hub for electric vehicles in the next five years.
The country is projected to become the fourth-largest EV market over the next 20 years. And the charge is expected to be predominantly steered by electric 2-Wheelers and 3-Wheelers.
As the electric vehicle industry develops volume will count and certainly will help India push forward. But who owns the battery technology and the supply chain will be more crucial. The long-term opportunity for India’s EV future and its self-reliance is through the battery and the battery supply chain.
The battery and the supply chain provide the foundation. Contrary to the West, we do not have the luxury to pay premiums. It will not work, especially to ensure massive adoption all the way through the rural economy. The battery technology and manufacturing must be domestic. And we must build access to raw materials and key components of the supply chain. Time is of critical importance. Otherwise India will be beholden to China for its EV ambitions.
India is gifted with a very large two and three-wheeler market. It is a gift that no other market outside of China can replicate. India must take advantage of this unique market opportunity in developing its EV capabilities through the battery and working up through supply chain.
Electric 2W penetration in India is expected to reach 25-30 per cent and that of 3W at 60-65 per cent before this decade ends if public and private sector, with active support from both central and state governments, work with concerted fortitude to push EV adoption. India’s rural diaspora makes for perhaps the most interesting case study in accepting and escalating change - rechargeable, recyclable e-mobility solutions like bikes, scooters and e-rickshaws found eager customers here as they are seen to provide a faster and compact alternative to public transport for moving from inner areas to public places like markets, train stations etc.
The EV adaption in rural India is growing at a quicker pace for another crucial reason - lack of commercial petrol pumps at nominal distances. If you have to travel 20 kilometers to just fill up the tank, isn’t it more prudent to buy an electric vehicle that you can charge every night at your home?
India’s huge market for electric two and three-wheelers is waiting to explode - no other country in the world can lay claim to such a huge population ready to embrace change. But this growth must be anchored by Indian technology and stabilized by Indian participation in the battery supply chain.
There is an over-dependence on international suppliers for continuous supply of cells, components, and raw materials. In many cases companies are importing the entire battery. This strategy may help build EV volume but it will fail to ensure India becomes a major participant in electrification.
The focus on developing battery technologies and manufacturing locally also ensures thousands of jobs in one of the largest industries.
Continuing incentives in the EV space will help. But if we are to focus on long-term development we need to focus on battery technology and the supply chain – not EVs. For example, we might wish to consider separating electric battery incentives from EVs. If we get battery technology, battery manufacturing and the battery supply chain right, our EV future is secured. If we only focus on EVs and not the ingredients that make EVs possible, we have missed out on one of the greatest industrial advances in history.