Amara Raja, the second-largest automotive battery manufacturer in India is set to branch out and manufacture lithium-ion batteries.
The company will open India’s first technology hub to develop lithium-ion cells at a unit in Tirupati in Andhra Pradesh. This will also be the first manufacturing facility in the private sector for the next few years.
The move comes amid expectations of the EV market picking up in the coming years, with the share of electric two and three-wheelers reaching 20-25pc of the total.
The company believes lead-acid batteries will, however, continue to grow for the next few decades as the adoption of lithium-ion batteries will take time for commercial use. EV batteries are currently are largely imported from China.
Amara Raja has invested about Rs200mn ($2.76mn) towards the lithium-ion hub. It is one of the 10 companies to hold a technology license to manufacture lithium-ion cells. The battery maker is the first to start the line of production in India.
About two-thirds of the raw material required for lithium-ion batteries is available in India. Only some critical minerals will have to be imported. India is in talks with a few Latin American countries and Australia, endowed with these critical minerals.
Tata Chemicals also has received the license to manufacture lithium-ion cells and is likely to begin production at their Gujarat facility soon, according to reports.
The Production Linked Incentive (PLI) scheme granted Rs180bn for a minimum of 50GW of lithium-ion batteries in the domestic market. Amara Raja believes that in the next couple of years, the success of the scheme will be pronounced.
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