Investment In Battery Cell To Exceed $9 Billion By 2030 With Rising Demand For EVs- Report

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As per the latest report by ICRA, cell manufacturing investments will exceed $9 billion by 2030 due to the increased demand for various applications and future growth prospects.

The projections are based on the EV penetration in all segments of the automotive market and its exponential growth over 10 years. The battery remains the most important and expensive component of an EV.

Shamsher Dewan (senior vice president, group Head – Corporate Ratings, ICRA) stated that “EVs are still powered by advanced chemistry batteries, which account for nearly 35-40% of the vehicle’s price.”

Currently, Indian battery cells cannot be manufactured. Therefore, most EV manufacturers rely on imports. Manufacturing operations in India are restricted to the assembly of battery packs.

India must create its own battery cell development ecosystem to be able to reach mass penetration and a cost-effective cost structure. There are many challenges in establishing a cell manufacturing industry. The most important ones include technology complexity, capital intensive and availability of raw materials. He said that it would be crucial for battery manufacturers to continue to work with other players in the value chain and to reduce these risks. This will also help to create a solid framework for recycling.

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The annual demand for batteries for stationary applications (grid storage and telecom towers) is expected to be strong in addition to the high demand for EVs. ICRA predicts that this demand will grow rapidly and be significant.

The electric vehicle (EV), segment, saw significant growth in prospects due to Government support through subsidies, increased awareness, and product launches.

It will be crucial to achieving economies of scale in battery production in order to lower the price of an EV. This will also help reach pricing parity. Furthermore, the penetration of charging infrastructure will continue to improve slowly so energy efficiency improvements are essential. The creation of an innovation and research ecosystem would be possible if cell manufacturers are located near the OEMs. This would help in the development of better energy-efficient batteries that can withstand Indian climate conditions.

Numerous entities have made significant investments in the cell manufacturing sector to meet the anticipated surge in demand for EVs and stationary applications. Three companies have signed agreements with the Government of India, to receive incentives under the Production-Linked Incentive Scheme (PLI), for Advanced Chemistry Cell (ACC), and Battery Storage. This policy focuses on domestic value addition and will support capability development in the sunrise.

Because of their high energy efficiency and thermal stability, Lithium-ion batteries are the preferred choice for EVs. Lithium Nickel Manganese Oxide is currently the most popular cathode chemistry, but Lithium Iron Phosphate chemistry (LFP), is expected to gain greater acceptance due to its higher thermal stability, lower production cost, and increased acceptance. Other chemistries are still being developed, although commercial viability may take some time.

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