One initial setting of this tale is lithium-ion cells. Sony, which wanted to make its camcorders lighter, was the company that first made them commercially available. As technology advanced, Korean companies like LG and Samsung expanded their use of mobile phones. China then arrived. Through collaborative partnerships and reverse engineering, it also discovered how to create cells. Along the way, the applications for lithium-ion were once again broadened, and now they cover electric vehicles.
The ultimate question of how much demand there will be for essential minerals depends on this. China started giving EV customers subsidies around the time of the Olympics in Beijing. In addition, it persuaded provincial governments to provide funding for lithium mining and refining for EV batteries. This changed the public procurement of cabs and buses to electric vehicles (EVs). Localization has also gained attention. Cars had to be constructed domestically, with components coming from China, in order to qualify for subsidies.
The nation now leads the world in EV production. It not only has access to the raw materials required to make electric vehicles, but it also possesses knowledge and experience in their processing and refinement as well as the production of final products like batteries and electric automobiles.
Other nations are presently attempting to replicate China’s accomplishments. The US Inflation Reduction Act was covered in the first article of this series. Another law being considered in the US would grant magnets created in the country a $20 per kilogramme credit. Manufacturers may be eligible for a $30 per kilogramme credit if they purchase 90% of their component parts from US manufacturers.
India has adopted a similar strategy. Through programmes like FAME, it has subsidised EV consumers in the mobility industry. Additionally, the nation is promoting the usage of electric buses for public transportation. Additionally, the nation is attempting to establish an indigenous value chain for batteries with the Production Linked Incentive Scheme (PLI) programme for advanced chemical cell batteries.
Establishing a local value chain
CarbonCopy questioned Randheer Singh, a government advisor for the Union, about these programmes in May. He served as director (e-mobility) and senior team member (advanced chemistry cells programme) at Niti Aayog from January to June of this year. He quit NITI to create his own business.
He explained, “FAME is a demand incentive. “In the last ten years, all nations have developed such programmes to alter behaviour.” He said that the PLI system for batteries has been implemented nationwide concurrently. He stated that “these companies will have to ensure localization.” “They must guarantee a least of 25% localization in their batteries over the following two years. Localization must increase to 60% within five years of contract award.
They will therefore need to use locally produced cells, which will have locally produced CAM, electrolyte, or anode. “With PLI, the push is to start making cells in India,” said Uttam Sen, co-founder of e-TRNL Energy, a Bangalore-based firm attempting to manufacture cells in India.
It doesn’t end there. Other businesses than PLI are investing in the battery industry in India. Without government incentives for cell manufacture, “there is another lot coming up in ACC [Advanced Chemistry Cells],” added Singh. However, since they don’t have localization goals, these businesses might not localise the essential parts.
The government has raised the standard import charge on lithium-ion batteries to 10% in an effort to encourage them to localise as well. The import tax on battery packs used in electric vehicles has been increased.
This is comparable to the measures used by the government to increase domestic solar panel production. Strict import charges were imposed on imported panels in order to lessen the nation’s dependency on China and to increase domestic panel manufacture. However, this resulted in developers claiming they wouldn’t be able to achieve India’s challenging RE targets.
Is this EV technology available in India?
Two announcements that shocked observers of the EV industry occurred as this article was being prepared. First, CATL announced a battery that stores 500 watthours per kilogramme at a time when the majority of lithium-ion batteries have an energy density below 300 wh/kg. It claimed that this battery would be useful for electric aircraft and increase the range of EVs to 1,000 km per charge.
In the weeks that followed, there was an announcement that was even more astounding. This one came from Toyota, which has long faced criticism for delaying the transition to completely electric vehicles. The business declared at the beginning of July that it had created a solid-state battery that would give EVs a range of 1,200km and a charge time of no more than 10 minutes.
India is starting slowly as it attempts to build its own domestic EV supply chain. Other nations have established significant technological and manufacturing advantages in the fields of processing minerals and creating products for their final uses.
In response, the majority of Indian businesses are acquiring expertise. For instance, Reliance has acquired tech businesses like Lithium Werks (cobalt-free Lithium-ion) and Faradion (sodium-ion). Dutch electric scooter manufacturer Etergo was bought by Ola. Previously, Tata acquired knowledge regarding EVs through purchases like Land Rover.
As this essay is being written, companies like Reliance and JSW are vying for control of Chinese companies like MG Motor. According to Economic Times, “Companies with links to China have been facing challenges in getting approvals for new investments due to rising tensions on the India-China border.”
The newspaper claims that MG India has been waiting for about two years for official authorisation to raise money from its parent. It claimed that “it has now begun looking for other options to raise the necessary capital with little success so far.” Likewise, BYD is dealing with difficulties.
According to Economic Times, MG Motor is debating whether or not to manufacture battery cells and hydrogen fuel cells in India. It is obvious enough how such a system is supposed to operate. MG will produce in India and source technology from its parent. When these businesses are forced to produce in India, manufacturing expertise will spread more quickly.
Through similar joint ventures, China has also acquired industrial expertise. Foreign manufacturers are likely to enter given the scale of the Indian market. The nation wants it to cooperate with its merchants. The news that Tesla has asked its battery suppliers to initiate negotiations with the Indian government to establish battery manufacturing facilities there broke as this piece was being prepared. According to Business Standard, Panasonic Energy has already contacted the authorities.
