Building on its recently announced budget of Rs 10,000 crore for increasing the electric and hybrid vehicle adoption through the second phase of the FAME scheme, the government of India now aims to address the energy storage requirement for these vehicles. For this, the cabinet has approved Phased Manufacturing Programme (PMP) on March 7, essentially targeting ¡°clean, connected, shared and sustainable¡± mobility solutions.
Headed by Prime Minister Narendra Modi, the cabinet approved the PMP under its National Mission on Transformative Mobility and Battery Storage (NMTMBS). The aim is to run the PMP for five years to ¡°support setting up of few-large scale, export-competitive integrated batteries and cell manufacturing Giga plants¡±.
The whole agenda is to promote indigenous manufacturing of all EV components. The PMP scheme, scheduled to pan out from 2019-20 to 2023-24 will be approved by the NMTMBS to help with this.
The steering committee for the mission will constitute representatives of 8 ministries and departments for enhanced synergy and easier and meticulous creation of policy framework. The programme also comes as a signal to the industry players to push for local manufacturing in India for their EV lineup.
(Representative Image: Reuters)
But why?
For those who are unable to find a valid reason for all the efforts, understand this: India is moving towards a future where transportation will largely be powered by electric drivetrains. Over the years, the FAME scheme has been the catalyst for this transition, subsidising the EVs and hybrids for the buyers, while incentivising their manufacturing for the makers. With the increased adoption of these vehicles, a corresponding increase in energy storage is required.
For this, lithium-ion batteries are the key components. Constituting a major part of the cost of EVs (around 40-50%), the batteries are the one possible solution to bring down the cost of EVs in India. Indigenous production of the batteries will help with this.
As per Debi Prasad Dash, Executive Director, India Energy Storage Alliance (IESA), India currently has 1 GWh of Li-Ion assembling facility. All the involved OEMs are currently importing batteries from China, Taiwan and Korea. Even though these Indian companies (some) have already entered into the cell to pack assembling, there is none, as of now, involved with Li-Ion cell manufacturing within the country.
(Representative Image: Reuters)
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The good news, however, is that 4-5 institutions are in discussion to put up cell manufacturing facilities in India in the next 2-3 years, as per Dash. The recent move by the govt to lower customs duty on imports of parts and components of EVs to 10% from 15% will also help with this.
An additional, and often unnoticed benefit, is the simultaneous foreign investment that such large li-ion battery plants will be attracting. Recently, Bharat Heavy Electricals Limited (BHEL) and Libcoin had announced a consortium to build India¡¯s first lithium-ion battery (LIB) gigafactory, with initial capacity of 1 gigawatt-hours which would eventually be scaled up to 40 GWh. Maruti Suzuki India Ltd (MSIL) in collaboration with Toshiba and Denso had also made a similar announcement earlier.
Once set up, such plants can cater to the market demand within the country as well as the neighbouring region. ¡°Once the Make In India initiative for lithium ion batteries kicks off, India will able to compete with the countries like China, Australia, Germany, USA, Taiwan, South Korea and other Li-Ion manufacturing countries,¡± says Dash.