Amara Raja Advanced Cell Technologies (ARACT) is set to become among the first lithium ion cell manufacturers in India, with its manufacturing facility expected to be fully operational in the next 1-1.5 years, said Jayadev Galla, chairman of Amara Raja Group.
“We are in the race to be among the first for lithium ion cell manufacturers in India…our customer qualification plant with a capacity of 500 megawatts is being built, and will be ready in a year-year and a half. Once that manufacturing process is proven out, we will be scaling it to a giga factory,” Galla said, speaking to Moneycontrol at the World Economic Forum (WEF) in Davos on January 22.
In August last year, Amara Raja Advanced Cell Technologies (ARACT), the wholly owned subsidiary of the Amara Raja Energy and Mobility Limited (ARE&M), inaugurated its battery pack plant at Divitipally, Mahabubnagar district in Telangana, to build lithium-ion battery packs.
The company planned to have an in-house cell manufacturing facility inside the same Gigafactory. This Customer Qualification Plant (CQP), with a capacity of 500 megawatts, is expected to be fully completed in a year-year and a half, according to Galla. Once this is built, the company will scale it further to 16 gigawatt hours.
“When we complete that investment cycle over the period of 5-10 years, it will come to about Rs 9,500 crore,” he said.
To be sure, battery cells are individual units that store energy. Modules are groups of these cells connected together, and packs are assemblies of modules that deliver power to a device. Currently, there are no lithium ion cell manufacturers in India, with all of the demand being met via imports, primarily through China.
Meanwhile, the company is operating a full-fledged battery pack assembly unit in the same location, supplying to several Indian firms, and multi-national corporations operating in India.
“While we are not at full capacity yet, we are hoping to get there soon enough,’ Galla said.
Expansion plans
The company is also building a research and development facility at the Aerocity in Shamshabad across a span of eight acres.
“We want to be technically independent from the rest of the world. India not only has to produce in India, but also design, and research domestically so that geopolitical risks don’t affect our business,” Galla said.
Moreover, it plans to expand its lead acid battery capacity by setting up new facilities outside Andhra Pradesh.
“We will be expanding our lead acid battery auto capacity as well. Till now, all of our lead acid plants have been in Andhra. Will be looking to set up something in north India,” Galla said.
Growth prospects
Amara Raja is also betting big on the two- and three-wheeler electric vehicle (EV) space for growth. According to Galla, the light mobility segment that will take off the fastest in India.
“That (light mobility) is where the cost parity has already taken place, even without incentives. The cost of ownership for both ICE vehicles and EVs is almost the same. The market dynamics is at par between the two. Whereas for larger vehicles, four wheelers and commercial vehicles, the economics still do not work out without incentives,” he said.
In a bid to supporting the expansion of India's electric vehicle market and advancing the localization of EV technologies, Amara Raja had, in August last year, signed a pact with Ather Energy to create and supply Nickel Manganese Cobalt (NMC) and Lithium Iron Phosphate (LFP) lithium-ion cells for electric two-wheeler batteries.
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