India working to cut lithium imports, boost EV sector, says NITI chief Amitabh Kant

“Lithium content in a cell is less than 4 percent (including electrolytes), so we still have the major portion of the cell for localisation. If we don’t have oil, then we shouldn’t have refineries? I think we need to see this differently,” NITI Aayog CEO Amitabh Kant said in an interaction with Moneycontrol.

“With the work being done by KABIL, urban mining and thrust to localise the remaining supply chain, we are more than ready to tackle this challenge,” he said.

A parliamentary panel set up to review the challenges faced by the EV industry has asked the government to work towards achieving self-reliance in manufacturing lithium-ion batteries to reduce dependency on other countries, especially China. In its report presented in Parliament earlier this month, the panel headed by K Keshava Rao pointed out that India lacked an integrated EV ecosystem.

Why lithium supply is critical for EV growth

Ninety per cent of the world’s manufacturing of Advanced Chemistry Cell (ACC) is done in China. India doesn’t have a manufacturing facility for lithium-ion battery and, as a result, all manufacturers import cells and battery packs.

Indian original equipment manufacturers (OEMs) need government support for making lithium cells for the long term. Securing lithium supply could help in making batteries at a globally competitive price, with the potential to reduce the price of EVs, the Keshava Rao panel said.

EVs use batteries which provide the required efficiency and life cycle, not particularly lithium batteries, Kant told Moneycontrol. World over, different cell chemistries are at various stages of commercialisation, including sodium ion, aluminium air, zinc air, super capacitors and also hybrids of these technologies.

Of course, lithium is the most prevalent as of now, and may remain so for the next 4-5 years. “But I’m sure other cell chemistries will soon pick up. We have to understand that the use of lithium has increased since 2016 and hence mining of lithium, in terms of reserves, etc, is being explored only now,” said Kant.

India’s trajectory of transition to clean mobility is different from its peers in the West, Kant said. Not only India’s EV transition is being led by two and three wheelers, but also by the push towards renewable power and fiscal incentives such as Faster Adoption and Manufacturing of Electric (FAME) II and production-linked incentives (PLIs).

“India is already the number one manufacturer and market for two and three wheelers in the world and, hence, this presents us the opportunity to lead in the EV segment too,” he said.

In the last two years, several start-ups have flourished and more than $3.5 billion were pumped into the EV sector during January-July 2021. A report by the Council on Energy, Environment and Water (CEEW) has pegged the EV market in India at $206 billion by 2030.

The big EV rush

In addition to start-ups, traditional vehicle manufacturers have planned heavy investments into the EV sector. Companies such as Hero MotoCorp, Bajaj and TVS have big plans to invest in the EV space. “Further, we are seeing an overwhelming interest in battery PLI. This will give a big impetus to cell manufacturing in India and will also bring down the cost at par with international prices,” Kant said.

India is among the few countries that support the global EV30@30 campaign, which targets at least 30 percent new vehicle sales to be electric by 2030. The government has lined up series of policy initiatives such as the Faster Adoption and Manufacturing of Electric (FAME) subsidy programme to create an enabling environment.

Most states have implemented complementary policy initiatives to provide further support to e-vehicle uptake. “With all these efforts, I’m confident that India will continue to be a world leader in 2w/3w market for EVs and also EV parts manufacturing,” Kant said.

There is also a sustained effort to develop EV infrastructure in the country, especially for charging points. Disruptive business models such as BaaS (battery as a service) and EaaS (energy as a service), along with charging points at malls, visitor parking and vehicle parking areas at metro stations, public parking points and railway stations, together with mini battery swapping stations within local shops will help in promulgation of EV infrastructure across the country, according to Kant.

FAME II has an outlay of Rs 1,000 crore for developing charging infrastructure and recently OMCs had come out with EOIs for almost 22,000 fast charging points at their retail bunks.

For public e-buses, creation of infrastructure in depots on a requirement basis has been implemented as per FAME II guidelines. There is also a plan for putting up fast-charging points at every 100km on major highways and expressways in nine cities with over four million population and one slow charging point at every 25km on both sides of highways.

There is also a concerted attempted to keep the costs of EV products under control. From a fiscal perspective, both the supply and demand sides have been catered to. Supply-side ACC (advanced chemistry cell) PLI and auto PLI (combined around $5.7 billion) have ensured localisation and cost affordability of cells and advanced auto parts for EVs, whereas remodelled FAME II has ensured upfront cost reduction of EVs with increased incentives.

According to Kant, the impetus is on MADE (mobility as a service), automated, digital and electronic solutions as a whole, so that benefits reach the last available person and their mobility needs are taken care of through cleaner modes.