India made by batteries are expected to be 20-30% more expensive than their Chinese counterparts because of a serious dependence on the import of raw materials, according to an industrial director who works on the Supply Chain of the cell at an electric two-wheeler company that spoke as a result of anonymity. Moreover, analysts believe that an enormous overcapacity of EV battery cells in China means that aggressive prices are to stay here.
“I think everyone would have noticed that the prices that now come from China are quite aggressive,” Vikramadithya Gourineni, executive director of new energy company at Amara Raja Energy, told analysts in a profit call on 30 May. “The Peles Prices, the Prices for Energy Storage System (ESS). So sure, that's on a downward trend.”
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Certainly, India currently does not produce EV batteries -usually lithium ion batteries are used in the country. All local EV -Makers import batteries – three fourth of Chinese companies such as Catl, BYD and Eve. The rest comes from South Korean companies (such as LG, Samsung) and Japan (Panasonic).
The government of the Union and the private industry work to change that. According to the indicated goals of the center, the country wants to produce 100 GWH Lithium ion batteries in Inside In Inside In Inside. The demand for Lithiumion battery from India is expected to grow to 127 GWh per FY30 from 15GWH in FY24, according to a report of November 2024 by care assessments.
However, the Chinese perspective has asked local battery makers for support from the government. “As soon as the domestic production capacity of cells is present, the government must switch the priority on stimulating the production of local cells,” said Exide Industries Managing Director and Chief Executive Officer Avik Roy on a phone call with analysts on 6 May after the announcement of the company's Q4 results. “Otherwise this industry will never grow in India.”
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Furthermore, Amara Raja's Gourineni said that future investments will also depend on “our confidence in being able to meet these (Chinese) prices”. Amara Raja has reserved more than £1,000 crore for investing in his lithium ion battery factory near Hyderabad, which is expected to start production in FY27.
Exide, who has already invested more than £So far 1,000 crore for a gigafactory near Bengaluru, also wants to commercialize the production of lithium-ion cells in the current financial year.
Other players who make their own lithium ion cell gigafactories include Reliance Industries, OLA Electric, Tata's Agratas, Anrajesh Exports, among others.
Requests to these companies for comments remained unanswered until the time time.
Against the Chinese
The executive vice-president Jay Kale of Elara Capital wrote in a 12 can note that overcapacity in cells in China will put pressure on the battery prices in the medium term. “Most cell makers are expanding the capacities by +50%, which is a concern for the profitability of the industry. Having said that, the battery prices in China are still 10-20% below that in the US and Europe,” Kale wrote. “We expect the gap to increase as China continues to dominate the supply chain and the worldwide capacities are still miles away from China's.”
There are two types of battery chemistry in EV batteries, lithium iron phosphate (LFP) and Nikkelmangan Kobalt (NMC). Werelaars in the industry report that in some cases they have seen the prices are lower than $ 50 per kilowatt hour of the recent average of $ 55 kWh for lithium -iron phosphate (LFP) batteries. NMC battery prices are still floating around $ 60 kWh.
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Different estimates suggest that China controls around 80% of the world's lithium ion battery market. Moreover, Chinese players do not have to rely on the import of raw materials such as lithium to make the batteries, because it dominates lithium extraction and processing worldwide with a market share of 80%, according to the organization for research into China and Asia.
On the other hand, India currently has no processing capacity for lithium, which means that all raw material must also be imported. In FY24, the country imported nearly $ 3 billion according to the data from the Ministry of the Ministry. More than three -quarters of that came from China.
What should India do?
Given the dependence on the import of important raw materials, Harshvardhan Sharma, group head for car technology and innovation at Nomura Research Institute Consulting & Solutions India, it noticed that Indian companies should not try to match tactical priceplay from abroad.
“The focus must be on building a sustainable battery product, something that is not feasible at the extremely low price levels,” Sharma said. “Over time, we can expect market prices to adapt to more sustainable level.”
Vikram Handa, director of the manufacturer of the manufacturer of battery material Epsilon Advanced Material, agreed that investment decisions in EV batteries are difficult, given the low prices and overcapacity of the Chinese.
“Investments in technology must be from the perspective of building up domestic capacity, such as how the US is doing,” Handa saidMint. “They subsidize and ask players to build capacity because it is a critical technology.”
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In 2021, the central government drove the £18.100-crore production Linked Incentive (PLI) schedule for building 50 GWH capacity. So far, however, no stimulans in the schedule have been paid to three selected players – OLA Electric, Reliance Industries and Rajesh Export – because they remain behind because of their set period lines for various reasons, including the purchasing of raw materials.
However, Handa believes that the current subsidy level of India of $ 12-13 kilowatts per hour is too low compared to support by countries such as the US, which offer $ 45 kilowatts per hour.
Don't forget rare earths
The risk of dependence on China comes at a time when the car industry is concerned about the limitations on the export of rare earth magnets, which are needed in vehicles of electric and internal combustion engine.
About 90% of the processing capacity of such magnets of the world is at China, which imposed new restrictions on export on 4 April.
According to the new process, it is expected that car companies submit applications with certificates that state that the component will not be used in a defense application.
Indian battery makers currently do not have to experience any restrictions on lithium, but the outlook on a future limitation of such exports also increase the urgency of building up domestic capacity.
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