Evaluating the Electric Vehicle Supply Chain and Scope of Indigenization
Electric vehicles (EVs) play a vital role in achieving the country’s net zero-emission goals. The government of India has set an ambitious target for EV deployment by 2030 and beyond. The key components in an EV comprise— a battery, powertrain (motor, powertrain), chassis, etc. a battery has the maximum cost-share (45-50%) in the total vehicle, followed by the powertrain cost (15-20%). Further, the battery cells and motor are the key components in a battery and powertrain. The key components/materials used in making cells/batteries and motors are currently imported.
To fulfill future demand for batteries and motors in the EV deployment, the country needs to develop a complete value chain domestically. To develop the indigenous battery ecosystem, the government of India has announced a target of 50 GWh advanced cell chemistry (essentially Lithium-ion batteries) and 5 GWh niche battery technology manufacturing by 2024. In a recent development, three companies have signed the production-linked incentive (PLI) agreement to kick start the process of building ACC battery Giga factories in the country. A production-linked incentives scheme has been introduced to support these manufacturing plants.
Most of the equipment and raw materials will be imported to set up these large-scale manufacturing plants. Therefore, it requires a detailed analysis of India’s existing battery and EV motor manufacturing ecosystem and its preparedness for large-scale manufacturing. There is a need to strategize— the raw material supply chain, technology transfer, and R&D to develop new and innovative technologies and equipment, financial framework, policy and regulatory framework, skill development programs, etc., to support domestic manufacturing. Therefore, the International Copper Association India (ICA India) and India Energy Storage Alliance, through this collaboration, will identify the crucial gaps associated with the domestic manufacturing of batteries, EV motors, and related components and recommend suitable solutions.