Karnataka's Emergence As A Li-Ion Battery Powerhouse Holds The Key To Rapid Growth Of EVs In India

Industry analysts foresee Karnataka emerging as as a pivotal hub for lithium-ion battery production.

This trend is highlighted in the fact that four proposals for lithium-ion battery and cell manufacturing facilities in and around Bengaluru have been received or implemented within the past year.

To start with, in April this year, Amara Raja-backed Log9 Materials, inaugurated the country's first lithium-ion cell manufacturing facility at its campus in Jakkur in Bengaluru. 

The new unit has a initial capacity of 50 Mega-watt hours (MWh) and will cater to Lithium Titanate and Lithium Ferrophosphate cell manufacturing.

Further, on 1 August, US-based International Battery Company (IBC) signed an investment pact worth Rs 8,000 crore, to build a battery manufacturing facility on a 100-acre land at the Information Technology Investment Region at Devanahalli, in the Bengaluru Rural district.

The facility will focus on the proprietary lithium-ion prismatic battery cell as they contain more energy than standard cylindrical cells. The IBC unit is expected to go live by 2025, with battery giant aiming to ramp up capacity to 10 giga-watt (GW) by 2028.

Similarly, domestic battery maker Exide Energy is setting up a lithium battery cell plant at Devanahalli. The work on 6,000 giga-watt hour (GWh) production capacity is in progress and operation is likely to commence in 2024.

The country's largest lead acid battery maker has further sought additional 40 acres of land from the Karnataka government in Devanahalli industrial area for setting up the second phase, which will add another 6,000 giga-watt of production capacity.

The proposal for the additional land has been submitted and the company has plans of initiating the setting up of the proposed second plant in the year 2024.

Lithium-ion cell manufacturer NSure Reliable Power Solutions is also set to launch its giga-factory near Bengaluru. The Rs 1,050-crore plant is expected to start operations by October.

The Big Deal

Karnataka's endeavours throw light on what might just be the need of the hour when it comes to electric vehicles (EVs) in India: large-scale lithium-ion cell manufacturing. 

Though the country’s Lithium ion (Li-ion) battery requirement is huge, India’s battery manufacturing sector is yet to take off and majority of the demand is catered through imports.

According to an independent study released by the Council on Energy, Environment and Water, India’s import bill for batteries touched USD 1.8 billion in 2022, with USD 1.6 billion or over 85 per cent worth of imports from China.

To put this into perspective, according to Venkatesh Valluri, president, IBC India, the country would need Li-ion batteries in the range of about 150 GW of capacity by 2030. 

However, the current production capacity of lithium cells total around 1.5 GW, thereby creating a huge supply-demand mismatch.

Moreover, the substantial reliance on imports has kept battery costs high impeding the broad acceptance of EVs.

Calling the development “a step in the right direction,” auto experts believe that availability of the right talent stands as the primary impetus behind the increased influx of investments in the vicinity of Bengaluru.

“Battery making takes a lot of power, land and logistic support. But the one key requirement is talent. Unlike most of the manufacturing sector, these are white collar jobs for engineers, diploma holders, techies, and Bengaluru offers a lot of incentives to the companies’ potential employees," an ET report said quoting auto-industry veteran M P Shyam.

Further, industrial and investment policies of the state government are also conducive to nurturing an ecosystem favouring the growth of industries.

Trends suggest Karnataka is well placed to get the largest share in the lithium-ion battery manufacturing ecosystem.

However, experts also highlight that the government needs to think strategically about different aspects of the value chain — procurement, manufacturing, deployment, and recycling, keeping in mind the rapidly evolving battery technologies.

The progress on each of these aspects is currently limited and would require a mix of stakeholders — from government, industry, research, and academia — to work together.