The growth trajectory of electric vehicles (EVs) is critically hinged on the evolution of battery technology. Batteries need to be lighter, cheaper, quicker to charge, and safer which will instil confidence in consumers to switch to EVs. Yet, despite the strides made, batteries still constitute around 40-50 percent of the vehicle's final cost — a critical barrier to the uptake of EVs.
Adding to the challenge, almost all EVs in India run on imported batteries. The number of imported lithium-ion batteries quadrupled between 2016 and 2019 – from 175 million in 2016-17 to 713 million in 2018-19.
In 2018-19, India imported batteries worth $1.23 billion. To reduce this dependence, and incentivise local businesses to invest in scaling up the manufacturing of advanced chemistry cells, the Government of India (GOI) announced a production-linked incentive (PLI) scheme with an outlay of Rs 18,100 crore.
The Government of India received 10 bids for a cumulative capacity of 130 GW — more than 2.5 times the initial target, and selected four industry players under this. In addition to the 50GWh capacity allocated under the programme, the three companies which have signed the agreement under the PLI scheme, are expected to create battery manufacturing capacity to the tune of ~95 GWh.
The modern EV batteries contain earth metals like lithium, cobalt, nickel, manganese, copper, and graphite, for making a lithium-ion cell. China is home to nearly 60 percent of the Earth's rare metals. Keeping the objectives of Aatmanirbhar Bharat in mind, it is vital to ensure that such metals are readily accessible by India’s manufacturing sector. Extracting metals from end-of-life batteries, though challenging, helps minimise the import costs of these natural resources as fluctuations in their market price directly impacts the cost of EV batteries.
Additionally, recycled lithium-ion battery cells produce more nickel (17 times), lithium (4-5 times) and cobalt (10 times) than their respective natural ores. Moreover, the mining of rare earth metals is accompanied by characteristic carbon footprints. For lithium alone, the CO2 emissions can range from three to 17 tonnes per tonne of lithium extracted and processed. Such footprints, though limited through EV operations in life cycle terms, can be further reduced if batteries are reused and then recycled for the extraction of these minerals.
India should prioritise the development of a recycling and the reuse ecosystem to reduce its dependence on imported raw materials with a sustainable battery ecosystem. It is important to design policies and strategies that can ensure batteries are used to their full potential via second-life applications and End-of-Life (EOL) recycling. For example, before end-of-first-life batteries from EVs are sent to be recycled, they can be repurposed to be used for stationary uses such as energy storage in solar parks.
Globally, a combined total of over 180,000 tons of lithium, cobalt, nickel, and manganese is estimated to be recovered by 2030 through lithium-ion recycling — a value which is forecast to grow by approximately 10 times by 2042. Research predicts that in India between 3.5 and 17 GWh of lithium-ion batteries from passenger and freight vehicles will reach the end of their useable life by 2030. Without a reuse and recycling policy, the onus of procuring end-of-first-life lithium-ion batteries lies with recyclers, a significant challenge that prevents the scaling up of battery recycling.
As per estimates from JMK Research, the annual lithium-ion battery recycling market is estimated to be worth $1 billion with a capacity of 22-23 GWh by 2030. While several states, like Assam, Odisha, Telangana, Tamil Nadu, Uttar Pradesh, Madhya Pradesh, and Andhra Pradesh have provided measures for the recycling and second-life application of batteries, India needs a comprehensive policy that streamlines the second-life application of batteries in renewable projects, and more significantly formalises the battery recycling sector.
The first step in the process is to identify stakeholders and affix responsibility. For instance, neither the vehicle manufacturer nor the consumer would be inclined to take responsibility for their battery's EOL management. Similarly, operators of renewable energy projects or other players in EOL batteries are not obliged to ensure the safe disposal and recycling of the battery. Some of these concerns have been addressed in the draft ‘Battery Waste Management Rules, 2020’. This, however, hasn't been notified and implemented yet.
In addition, NITI Aayog's draft ‘Battery Swapping Policy’ covers aspects that enable battery reuse and recycling. The draft mandates for the development of regulations and standards for reusing and repurposing EOL batteries from EVs.
A comprehensive policy to recycle batteries will reduce India's dependence on imported batteries and raw materials and the need for mining of metals subsequently reducing the operational costs of renewable energy (RE) projects. This requires an alignment of efforts from the national government, state regulators, battery industry stakeholders, and consumers to embark on a sustainable future.Pawan Mulukutla is Director for integrated transport, electric mobility and hydrogen, and Parveen Kumar is Senior Manager, electric mobility, at World Resources Institute. Views are personal, and do not represent the stand of this publication.