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Just a couple of days back we reported that chairman of Japan’s Suzuki Motor has warned India that Indian dream of all-electric vehicles on road by 2032 can seriously hamper if India do not start manufacturing batteries used by electric vehicles (EVs) locally in the country. And, it seems that omniscient people at prime minister’s office (PMO) has already started to work out for same.

According to a report by LiveMint, the PMO has asked department of heavy industry to redraft its proposal to offer incentives, which was earlier for EVs only and not for batteries, which is at core of EVS. The PMO has sought reworking of a proposal to offer incentives of as much as $759 million (₹5,500 crore), which will mostly be use to encourage local manufacturing of lithium-ion (Li-ion) batteries used in EVs.

Last Week, the PMO returned the proposal and asked the department to redraft the plan, incorporating ways to promote local manufacturing of lithium-ion batteries to reduce their prices, as well as of battery-powered vehicles, said the report citing two people privy to this development.

It is a matter of fact that Li-ion batteries decides the cost electric vehicles and the cost of batteries is one of the major hurdles standing in the way of not just electric cars but household solar batteries as well. However, if these batteries can be manufactured locally then this can bring down the cost of EVs substantially.

Currently, India does not produce Lithium or Cobalt-based batteries and instead imported these from China, South Korea and Taiwan as India does not have any reserves of its own, unlike Latin America and Australia, which have Lithium reserves which can be acquired by India to provide the raw materials for its local battery manufacturing ecosystem.

Li-ion battery pack of BMW i3 [Image – blog.ucsusa.org]

The import duty on the Li-ion batteries is currently at 20% (increased from 10% in FY-2018 Budget). The cost of these EV batteries are calculated in the ‘$ per kWh’ unit and as of 2018, the cost per kWh of electric car batteries is between $225-$250 (about ₹16,000 to ₹18,000). If manufactured locally, the cost single battery pack can go down by 20-25 per cent, approximately.

Meanwhile, China is rapidly capturing Li-ion battery production, in its latest move to secure its position in the world industry.

According to NITI aayog report, in order to meet India’s EV ambitions through 100 percent domestic manufacturing of batteries it would require at least 3,500 GWh of batteries at a wholesale cost of $300 billion (₹20 lakh crore).

In June this year, Indian space agency Indian Space Research Organisation (ISRO) invited bids from local startups and suitable firms for its in-house indigenously made technology of large-scale production of lithium ion batteries.

It is also to be noted that India also has a local EV Battery Startup called Gegadyne. It has a patent pending battery technology which will enable to recharge batteries in a rapid manner without the need for fast charging. The startup also touts itself as company having “India’s Indigenously Developed Fully Electric Vehicle & Energy Storage System”.

In a separate report, the cost per kWh is reducing however, in year on year. For example, in 2010, the same cost was rated at $1000 and by 2026, the cost per kWh is slated to dip below the 100$ level, greatly boosting electric mobility by slashing prices overall by a huge margin.

Earlier this year, Mahindra and Mahindra Ltd and South Korea’s LG Chem announced their plans to collaborate on lithium-ion battery technology.

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