Mumbai: Leading valuation and consulting firm RBSA Advisors believes that the Li-Ion battery (lithium-ion battery) EV segment is expected to dominate the market over the decade due to its high energy density, fast recharging capability, and high discharge power.
In continuation of the first report released on the EV Sector in India, entitled “Powered by Power – The EV Industry in India”, RBSA Advisors today released Part 2 of the 3 – part series which focuses on battery and the charging infrastructure. According to the report, Asia-Pacific is expected to dominate the EV battery market, owing to the increasing demand from countries such as China, India, Japan, and other countries.
Rajeev R. Shah Managing Director & CEO, RBSA Advisors, “Batteries account for approximately one-third of the total purchase price of EVs today, and those battery packs’ price fell by more than 70% over the last six years. Additionally, the cost of lithium-ion batteries has been steadily decreasing and buoyed by continuous innovation in technology, increased production scale, prices may fall fromUSD 137/kWh in 2020 to around USD 73/kWh by the end of this decade”.
If India’s 2030 dreams on EV mobility are to be realized and if the country meets its goals for a rapid transition to shared, connected, and electric mobility, India’s market for EV batteries alone could represent more than one-third of global EV battery demand by 2030.
Adds Shah, “Perhaps the most difficult challenge that India faces as far as EV Battery manufacturing is concerned is the lack of basic raw material. India does not have reserves of some of the most important Li-Ion components nor of the copper used in conductors, cables, and busbars. Currently, EV Battery manufacturing in India is at its infancy and India is reliant mostly on imports. There are a number of challenges faced by India as far as local manufacture of EV Batteries are concerned.”
India lacks the presence of established producers of EV batteries and lacks state-of-the-art facilities for both sufficient capacity and capability. Moreover, being a highly capital-intensive sector, and the relatively nascent stage of battery manufacturing in India, investment risks in this sector are considered to be high. Another related issue is the disposal of these Li-Ion batteries that are past their life. Currently, dead batteries are either used for landfills, or are dismantled for the extraction of valuable material. Landfills have an environmental aspect to be considered and dismantling them also implies an expensive process. India at present lacks this process technology too.
An alternate battery recharging method is battery swapping wherein a discharged battery is simply replaced with a precharged one. This avoids the time taken by an EV to gets its battery charged through a charging station and reduces the upfront cost of an EV as a battery is now being leased instead of being bought. The government has permitted the sale of electric 2W and 3W without a battery pack in an effort to boost the battery swapping infrastructure. In addition, several State Govts. too, in their EV policies, have provided incentives to Battery Swapping Stations. Battery Swapping has special significance for fleet operators (2W and 3W) as the utilization of their fleet is maximized during peak hours through battery swaps rather than having to wait for the charging stations to restore the lost charge in the batteries. Each battery swap takes less than 10 minutes and requires much smaller space to install compared to charging stations.
There is little doubt that sooner or later EVs will be the talk of the town. India has set itself a clear-cut 2030 objective in this regard and though there are more than teething issues currently related to the battery and charging infrastructure space, over time this is going to be resolved. The Government initiatives in this regard aided by States finalizing their EV policies are concrete steps in the right direction.