industry

Supply chain, talent key challenges to setting up cell manufacturing in India for Electric Vehicles


Talent and supply chain will be the key challenges for companies planning to set up lithium-ion cell manufacturing in India under the government’s Rs 18,100-crore production-linked incentives (PLI) scheme, according to multiple industry executives.

The active materials used in such cells—ones that undergo chemical reactions to store power—require sophisticated manufacturing processes that are cost-competitive only at a large scale. These supply chains have already been set up in other countries, like China and South Korea, and setting the same in India will be challenging unless there was sufficient scale.

“There’s no point in, you know, making a couple of Gigawatt-hours of materials. You will never be competitive globally,” said Stefan Louis, CEO of Nexcharge. The company is a joint venture between India’s largest lead-acid battery maker Exide and Switzerland’s Leclanche.

Meanwhile, there is no real know-how in terms of cell manufacturing in India barring some researchers, said Sohinder Gill, director-general of Society of Manufacturers of Electric Vehicles.

“Battery is something that is technology-wise so difficult. So, anybody who wants to start making good quality cells, will first have to learn that and as such there is no real long-time experience of manufacturing cells and seeing their behaviour in the market,” he said.

Experts said Indian companies wanting to set up lithium-ion cell plants would have to tie-up with overseas companies for technology assistance. Foreign companies setting operations in India are sending Indians overseas to learn from their other facilities.

“Whoever is planning to invest will need to have a technical collaboration with some overseas company. The manpower can be trained to bring the technology into India,” said an executive at a leading Asian cell manufacturer that is also known for its consumer electronics products.

At least two companies, one Chinese and one Japanese, have recently sent their Indian employees overseas for training, this person said.

As part of the National Programme on Advanced Chemistry Cell Battery Storage, the government has mandated that companies must set up cell manufacturing capacities of at least 5 Gigawatt-hour (GWh) in India to get incentives. The companies are further required to achieve 25% localisation within two years before increasing it to 60% in five years.

“That’s quite an ambitious target, but realistic as well,” Louis said. “The government is very smart about that, saying that ‘If you want to set up cell manufacturing and you want to get help from the government, then you need to go big and you need to have localisation’.”

The government has also mandated companies to invest a minimum of Rs 225 crore per GWh of cell manufacturing capacity to avail the PLI scheme. However, Louis said the investment would be realistically closer to Rs 350 crore per GWh, excluding land.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.