Batteries’ market for e-vehicles to be worth Rs 200 crore by 2020
India could see a growth in battery market at 16.5 percent CAGR till 2020
Indian auto-industry is going through a phase of continuous alteration. While it has been asked to upgrade to Bharat Stage VI (BS VI) by 2020, they have been prodded by the government to begin planning electric fleet.
Underscoring the urgent need to introduce electric vehicles (EVs) to curb pollution, the union minister of road transport, Nitin Gadkari, asked the auto-makers to “either shift or be bulldozed”.
The statement brought shock waves to the industry even as auto-makers weighed the pros and cons of electric vehicles. The strongest argument against EVs being the lack of infrastructure and manufacturing hub of cars and batteries to be used.
Lithium-ion (Li-ion) batteries are suggested to be used for EVs as they can hold charge for a longer duration along with allowing frequent charging cycles. The battery, however, is sensitive to high temperature and is flammable.
The push towards EVs has raised questions about the cost of these cars which augments majorly from the battery.
Also read: Bulldozer, E-vehicles and BS-VI: Gadkari must bring ‘clear’ vehicle policy soon, feel experts
Li-ion batteries do not have a robust market in India right now, resulting in auto-makers being dependent completely on imports. This has made it tough for auto-makers to introduce electric fleet. The market, however, is expected to grow in the coming years.
“Li-ion battery market is an upcoming market… It’s not there right now,” said Abhinav Gupta, manager, business development, SES Batteries.
He said that India can be looked as an “emerging market” for batteries with the government making an aggressive push towards EVs.
Clean fuel will drive the market
According to a research by Frost and Sullivan, a global research and consulting firm, the Li-ion batteries’ market is expected to grow globally between 2013 and 2020. It said that “automotive segment is slated to exhibit higher growth beyond 2015”.
Source: Frost & Sullivan
The above chart shows that, globally by 2020, automotive sector will be the second largest (30 percent) revenue generator for Li-ion batteries after grid and renewable energy storage segment (37. 6 percent). The battery market is expected to garner a revenue of Rs 8000 crore by 2020, as per the research.
Experts believe that government’s push towards adoption of renewable energy by 2022 is another reason that will push the market ahead.
“Looking at Modi government’s plan of 175 GW of renewable energy by 2022, it is expected that accordingly the battery market will also grow to match the energy storage demand,” said R.Gopalan, associate director, Centre for Automotive Energy Material, an autonomous research and development centre.
He further said that government’s aim to begin EVs through two-wheelers will “exponentially increase the market of batteries”.
Centre plans to go all electric by 2030 even as it intends to float tender for e-rickshaws and e-scooters in November.
Also read: Full-fledged electric fleet to hit roads by December: Nitin Gadkari
Two-wheelers constituted 80 percent of the entire automobile sales during 2015-16 as per data provided by Society of Indian Automobile Manufacturers (SIAM), while E-scooters were adopted more than 11 times by people against e-cars during 2016-17.
Import impact
Lack of manufacturing site in India is considered as a major block in the minister’s ambition towards e-vehicular India.
“There is no battery manufacturing site yet,” said Rakesh Batra, partner, automobile industry and transportation, EY India.
Gopalan, however, said that “India is capable of making indigenous battery provided industries take an active part in procuring raw materials”.
By indigenous production of batteries, the cost can also be brought down significantly, one of the hindrances flagged by automakers.
“Battery cost could be reduced significantly by indigenisation of battery materials as it contributes more than 50 percent of the overall cost,” said Gopalan.
It has been projected that Li-ion batteries could see a global market worth more than Rs 200 crore for hybrid and electric cars by 2020. Gopalan said that India could see a growth in battery market at 16.5 percent CAGR till 2020.
‘No buyers’
Apart from cost, the market for batteries faces dearth of buyers currently that acts as a disincentive for the manufacturers.
“There are no buyers,” said Gupta adding that the only buyer, Mahindra, also had teething issues while dealing with EVs.
The research by Frost and Sullivan also said that pure EV market is anticipated to face “longer mass adoption cycle”.
Gopalan, however, said that “innovation in both battery materials and battery manufacturing technology will accelerate the growth of EV”.
Gupta said that government should provide necessary support to the manufacturers to ease the manufacturing.
He said that availability of land to set up testing laboratories and easy transportation facility could help push the market.
“Government should initiate to bring all laboratories and industries those who are working on battery programme together under one umbrella to make EV movement a reality in India. In addition, government can also support in providing infrastructure facilities for charging/swapping stations network,” said Gopalan.
Source: moneycontrol
