India will need to invest over $10 billion in cell manufacturing by 2030 as it seeks to accelerate the shift to electric vehicles, according to a report by Arthur D. Little released Wednesday.
Increasing cellmaking capacity is crucial for India to meet its demand for lithium-ion batteries, which will increase from 3 gigawatt-hour currently to 20 gigawatt-hour by 2030, Arthur D. Little estimates. The lack of local production is forcing India to import 70% of its lithium-ion cell requirement from China and Hong Kong, the report said.
India’s adoption of electric mobility is not “promising” and “far behind” western markets due to the country’s heavy reliance on imports and limited local production of cells, it said. High import dependence makes India’s electric vehicle industry vulnerable to global supply chain disruptions and is making electric models expensive as batteries make up 40% of the total cost.
Another reason for India’s heavy reliance on cell imports is its limited access to raw materials such as lithium, nickel, cobalt and manganese, which account for over 80% of a cell’s cost, according to the report. India should nurture bilateral relationships and investments in countries with rich natural resources. The government should give tax subsidies as well as develop special economic zones and lithium parks to boost investments in raw material refining and cell manufacturing, it said.