According to numerous industry insiders, the primary difficulties for businesses wanting to set up lithium-ion cells (used in electric vehicles) manufacturing in India under the government’s Rs 18,100-crore production-linked incentives (PLI) scheme would be talent and supply chain.
The active materials employed in such cells, which undergo chemical reactions to store power, need complicated production techniques that are only cost-competitive on a massive scale.
These supply chains have already been established in other countries, such as China and South Korea, and doing the same in India will be difficult until there is adequate scale.
According to experts, Indian firms interested in establishing lithium-ion cell factories will need to partner with foreign corporations for technical help. Foreign firms establishing operations in India send Indians abroad to learn from their other facilities.
Anyone wishing to invest will need to form a technical partnership with an outside enterprise. Manpower can be taught to transfer the technology into India, said an official at a major Asian cell maker recognized for its consumer electronics goods.
According to this source, at least two corporations, one Chinese and one Japanese have lately sent their Indian personnel overseas for training.
Moreover, except for a few researchers, India has no actual know-how in cell production, according to Sohinder Gill, director-general of the Society of Manufacturers of Electric Vehicles.
He further explained, “Battery is a very challenging technology to develop. So, anyone who wants to start generating excellent quality cells will have to learn that first, and as a result, there is no real long-term experience of manufacturing cells and observing how they behave in the market,”
Stefan Louis, CEO of Nexcharge, a joint venture of Exide, India’s largest lead-acid battery manufacturer and Leclanche of Switzerland, says that “There’s no use in producing a few Gigawatt-hours of stuff. You will never be internationally competitive,”
The government has mandated that enterprises set up cell production capacity of at least 5 Gigawatt-hour (GWh) in India as part of the National Programme on Advanced Chemistry Cell Battery Storage in order to get incentives.
The firms are also expected to achieve 25% localization within two years, with the goal of expanding to 60% within five years.
In order to participate in the PLI plan, enterprises must invest a minimum of Rs 225 crore per GWh of cell production capacity. However, Louis stated that the investment, excluding land, would be closer to Rs 350 crore per GWh.
“That’s a lofty goal, but it’s also achievable,” Louis remarked, further saying, “If you want to start up cell manufacturing and seek government aid, then you need to go large and have localization.”
