India’s Energy Storage Mission presents a significant opportunity for the country to become a global leader in
battery manufacturing, aligning with its aspiration of achieving 100% Electric Vehicle (EV) sales by 2030. To capitalise on this potential, India must navigate its current limitations in battery manufacturing and capture an
increasing share of the global battery market. The country’s EV battery market alone could be worth $300 billion from 2017 to 2030, potentially representing more than one-third of global EV battery demand by 2030 if India meets its ambitious goals for electric mobility.
KEY FACTORS DRIVING BATTERY MANUFACTURING IN INDIA
1. Economic and Environmental Benefits: The transition to EVs would reduce India’s dependence on oil imports, improve public health, and support the integration of renewable energy into the grid. Domestic battery manufacturing could allow India to capture 25-40% of the economic value initially, with the potential to increase this share to 80% as the country advances towards comprehensive manufacturing capabilities, including battery cells.
2. Manufacturing Strategy: The roadmap to achieving this involves three stages:
a. Stage One (2017-2020): Develop battery pack manufacturing capacity by importing cells and assembling them in India. This stage could capture INR 0.4-0.5 lakh crore in economic value.
b. Stage Two (2021-2025): Expand R&D and manufacturing strategies for battery cells, potentially increasing
the economic value to INR 2.0-2.9 lakh crore.
c. Stage Three (2026-2030): Full-scale battery production (cells and packs) while importing only select components like cathodes, capturing INR 9.3-13.7 lakh crore.
3. Global Competitiveness: As battery costs continue to decline globally (predicted to reach $60 per kWh), India’s ability to scale up manufacturing can drive down global battery prices by 16%, making the country a cost-effective hub for global battery production.
GLOBAL CONTEXT AND INDIA’S POSITION
India’s ambitious target of 100% EV sales by 2030 positions it as a key player in the global EV ecosystem. Globally, EV sales are rapidly increasing, with projections estimating that 7% of the global automotive fleet will be electric by 2030, compared to just 0.2% today. India’s leadership in EV adoption could influence other nations and contribute to a global reduction in battery prices, enhancing global EV production.
CHALLENGES AND OPPORTUNITIES
- Raw Material Supply: Although India lacks significant domestic reserves of lithium, cobalt, and other key battery materials, it can still capture a significant portion of the value chain by focusing on manufacturing capabilities and securing raw material imports from global markets. Recent studies indicate that global supplies of lithium will be sufficient to meet demand through 2030.
- Trade Balance: Despite the need for battery and raw material imports, India’s reduction in oil imports is expected to more than offset these costs. By 2030, India could save as much as INR 4 lakh crore by replacing petrol and diesel consumption with EV batteries, improving its trade balance and reducing exposure to oil price fluctuations.
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KEY CHALLENGES TO SCALING INDIA’S BATTERY INDUSTRY
1. Low Mineral Reserves: India’s limited reserves of crucial minerals like lithium, cobalt, and nickel, essential for lithium-ion (Li-ion) batteries, pose a significant challenge. Despite the global supply of these minerals being generally sufficient, India’s absence of substantial reserves of these materials necessitates the forging of international partnerships. This is critical to ensuring a steady supply of both raw and processed materials needed for battery
production.
2. Early-Stage Battery Manufacturing Industry: Currently, India lacks major battery producers and advanced manufacturing facilities. The country’s nascent battery industry must rapidly develop both capacity and capability.
While research institutions like the Indian Institute of Technology Madras and the Central Electrochemical Research Institute are making strides, scaling up to meet the growing domestic demand requires substantial investment and innovation.
3. Lack of Coordination Among Stakeholders: A key barrier to a thriving battery manufacturing ecosystem in
India is the lack of coordination among stakeholders, including material suppliers, manufacturers, vehicle producers, and government bodies. Effective collaboration is essential for defining technology pathways, aligning
investment strategies, and implementing supportive policies.
4. High Perceived Risk: The absence of clear long-term policies and uncertainty about future battery technologies create high investment risks. For India to attract significant investments, it needs consistent and transparent policies that can mitigate these risks and foster confidence among manufacturers.
THREE-STAGE SOLUTION APPROACH
To overcome these challenges and position India as a global battery energy storage hub, a structured three-stage approach is essential:
Stage 1: Initial Investment and Collaboration
• Incentivize Battery Pack Assembly: Encourage direct investment in battery pack assembly to reduce costs and increase local value addition.
• Forge International Partnerships: Develop multistakeholder consortia for joint research and development, pooling resources for advancing battery technology and recycling.
• Establish a Consortium: Create a consortium to guide future strategies for recycling, standardization, and battery technology. Companies should selectively pursue battery cell manufacturing where viable.
Stage 2: Growth and Development
• Leverage Research: Utilize research findings to inform and develop strategies for cell manufacturing growth.
• Develop Best Practices: Establish best practices for end-to-end battery manufacturing, including cells and recycling, and build a connected supply chain.
• Enhance Infrastructure: Invest in infrastructure aligned with the consortium’s battery manufacturing strategy.
Stage 3: Scaling and Integration
• Coordinate National Infrastructure: Ensure seamless integration between battery manufacturing and national infrastructure for charging, swapping, and recycling.
• Scale Manufacturing: Rapidly scale battery cell manufacturing through strategic investments, incentives, and coordination with existing battery assembly industries.
GUJARAT’S STRATEGIC ROLE
Gujarat is emerging as a pivotal player in India’s electric vehicle (EV) revolution, with its strategic role becoming increasingly prominent in the country’s transition to sustainable transportation. Gujarat, with its robust industrial base and strategic location, is well-positioned to spearhead India’s battery manufacturing revolution. The state’s existing infrastructure, supportive government policies, and vibrant industrial ecosystem offer a
conducive environment for scaling up battery production.
Key to Gujarat’s strategic role is its ambitious EV policy, introduced in 2021, which aims to transform the state into a
major manufacturing hub for electric vehicles and their components. This policy includes incentives for manufacturers, support for start-ups, and a strong emphasis on developing comprehensive charging infrastructure.
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OPPORTUNITIES FOR GUJARAT
1. Industrial Infrastructure: Gujarat’s robust industrial infrastructure provides a solid foundation for the development of cutting-edge battery manufacturing facilities. The state’s well-established industrial zones, such as those in Sanand and Vadodara, offer the necessary facilities and support for setting up high-tech manufacturing units. Gujarat’s industrial ecosystem, characterized by its advanced infrastructure and strategic location, can accommodate the needs of modern battery production. This includes dedicated zones for clean energy technologies
and ample space for scaling up operations. Leveraging these resources can position Gujarat as a major player in the battery manufacturing sector, essential for supporting the growth of the electric vehicle (EV) industry.
2. Policy Support: The state’s proactive stance on industrial policy and incentives provides a conducive environment for attracting investments in battery technology and manufacturing. Gujarat’s EV policy offers a range of incentives, including subsidies for setting up manufacturing units and battery production plants. This policy framework aims to foster innovation and attract both domestic and international investments. By capitalizing on these incentives, Gujarat can stimulate growth in the battery sector, encourage new entrants, and support the establishment of a sustainable battery supply chain. The state’s commitment to green energy and sustainability further enhances its appeal to investors in the battery technology space.
3. R&D Collaboration: Gujarat’s universities and research institutes are well-positioned to advance battery technology through collaborative research and innovation. Institutions such as the Indian Institute of Technology Gandhinagar (IITGN) and the Gujarat Technological University (GTU) can play a crucial role in developing next-generation battery technologies. By fostering partnerships between academic institutions, industry players, and government agencies, Gujarat can drive innovation in battery research. Collaborative R&D efforts can lead to breakthroughs in battery performance, efficiency, and sustainability, positioning Gujarat as a hub for cutting-edge technology in the EV sector.
4. Supply Chain Development: Gujarat’s strategic ports and logistics infrastructure facilitate the efficient import of raw materials and export of finished battery products. The state’s well-connected ports, including the Kandla and Mundra ports, are pivotal in supporting the battery supply chain. These ports offer seamless logistics for the import of essential raw materials and the export of battery components, ensuring a smooth supply chain for battery
manufacturing. Additionally, Gujarat’s comprehensive logistics network, supported by its industrial zones and transport infrastructure, enhances the state’s capacity to manage supply chain complexities. This efficient infrastructure is crucial for scaling up battery production and meeting the growing demand from the EV sector.
LEVERAGING GUJARAT’S INDUSTRIAL INFRASTRUCTURE FOR BATTERY ENERGY STORAGE
Gujarat’s well-established industrial zones and infrastructure present a significant advantage for developing state-of-the-art battery energy storage systems (BESS). The state’s robust industrial framework, combined with its strategic port locations and advanced logistics networks, provides an ideal environment for setting up battery manufacturing and assembly facilities. By leveraging existing industrial zones, Gujarat can facilitate the rapid establishment of battery production units and ancillary services, thereby accelerating the growth of its energy storage sector. The presence of major players like Gensol and IndiGrid, awarded tenders for substantial BESS projects, further underscores the state’s industrial readiness and capacity to support large-scale battery storage initiatives. These industrial advancements align with Gujarat’s goal of becoming a key player in India’s renewable energy revolution, supporting both domestic needs and export opportunities.
POLICY SUPPORT AND R&D COLLABORATION FOR BATTERY TECHNOLOGY
Gujarat’s proactive approach in industrial policy and incentives can significantly attract investments in battery technology and manufacturing. The state’s policies offer various incentives for setting up manufacturing units, including subsidies and support for research and development (R&D). Collaboration between Gujarat’s universities and research institutes is crucial for advancing battery technology through innovative research and development efforts. Institutions like the Indian Institute of Technology (IIT) Gandhinagar and Gujarat University can
play a pivotal role in fostering breakthroughs in battery technology, enhancing efficiency, and reducing costs.
This collaborative environment not only supports the technological advancement of battery systems but also positions Gujarat as a leader in the global battery storage market, further driving India’s ambitions in renewable energy and sustainable development.
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BATTERY ENERGY STORAGE AT CHARANKA: LEVERAGING INSIGHTS FROM MODHERA
Building on the success of the world’s first 24/7 solar-powered village at Modhera, Gujarat is set to further its renewable energy ambitions with a new Battery Energy Storage System (BESS) project at Charanka, the site of the state’s first solar park established in 2010. This expansion involves installing advanced battery systems with capacities of 20 MWh and 60 MWh at Charanka to enhance solar power integration and address peak energy demands. The Gujarat Power Corporation Limited (GPCL) has already begun the bidding process for this project, which aims to support agricultural activities by providing daytime solar power to farmers. The Charanka BESS will build on the valuable insights gained from the Modhera project, inaugurated by Prime Minister Narendra Modi in October 2022, which has demonstrated the effectiveness of BESS in stabilizing the grid and delivering continuous solar power. Over the past two years, Modhera’s 15 MWh BESS has enabled significant economic benefits,
including net savings of ₹31 lakh and the export of 2.1 million units of solar energy to the grid. As GPCL plans to double its solar capacity to 4,000 MW by June 2025 with new projects in Porbandar and Banaskantha districts, the Charanka initiative highlights Gujarat’s commitment to enhancing its renewable energy infrastructure and setting a benchmark for sustainable energy solutions across India. India stands at a pivotal moment in its energy transition journey, with its ambitions to become a global leader in battery energy storage and electric vehicle (EV) manufacturing poised to reshape the global landscape. By capitalizing on its potential and leveraging strategic initiatives, such as the three-stage manufacturing roadmap and the advancement of battery energy storage
projects, India can overcome its current limitations and achieve its lofty goals. The role of Gujarat, with its robust industrial infrastructure, supportive policies, and innovative R&D collaboration, is crucial in this transformative journey. As the state leads with projects like Charanka, the broader vision of a sustainable, high-tech battery manufacturing hub becomes increasingly attainable. The successful integration of these efforts will not only enhance India’s position in the global battery market but also contribute significantly to a greener, more sustainable future. The commitment to reducing reliance on fossil fuels and investing in renewable energy infrastructure underscores India’s dedication to driving global progress in energy storage and electric mobility.
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