Domestic production to meet 80 pc of India’s lithium-ion battery demand by 2027
Chennai: Lithium-ion battery demand is set to grow to 54 GWh by 2027 from the current consumption of 15 GWh. However, from being import-dependent, India will be able to meet 80 per cent of the demand from domestic manufacturing by then.
In FY24, India had a demand for 15 GWh of Li-ion battery storage largely from EVs and consumer electronics. This demand is expected to reach 54 GWh by FY27 and 127 GWh by FY30, estimates Care Ratings.
Currently, India imports almost its entire requirement of Li-ion batteries. However, largescale capacities being added will help India’s import dependency to shrink to 20 per cent by FY27 despite growth in demand.
Production Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC), along with various state government incentives such as capital subsidies, electricity tax and stamp duty exemptions and interest subvention will support faster addition of capacities.
Under the PLI scheme, the government provides a support of Rs 18,100 crore for over five years. Ola Electric Mobility has been allocated support under the scheme for 20 GWh. Ola expects to commission the facility in 2025 and will be achieving the target in phases. Reliance New Energy will receive support for 15 GWh, Rajesh Exports for 5 GWh and TBD for 10 GWh.
The beneficiary firm has to ensure achieving a domestic value addition of at least 25 per cent and raise it to 60 per cent within five years while also making the mandatory investment of Rs 225 crore per GWh for committed capacity within two years.
According to Infolink Consulting, companies must rely on their own funds to maintain construction in the early stages of projects. Given that lithium-ion battery manufacturing is capital-intensive, substantial upfront investments will increase operational burdens and challenge project sustainability.
China, the U.S., Poland, Sweden, and South Korea are the top five nations with lithium-ion battery production capacity. Together, these five countries accounted for 93 per cent of the total production capacity.
China is the largest importer of raw lithium and producer of lithium-ion batteries. Australia is currently the leading producer of lithium. In India, lithium reserves have been discovered in Jammu and Kashmir, Rajasthan, Karnataka, and Jharkhand.
