Introduction

Electric vehicles (EVs) are leading the way in sustainable transportation. That said, it is their batteries that are crucial factors for performance and environmental impact. This article explores the future of EV batteries in India, highlighting the latest trends and forecasts.

Top trends: Powering India's EV landscape

Solid-state battery innovations help enhance energy storage while reducing charging times significantly. This technological leap will usher in safer, more efficient, and longer-lasting batteries.

1. Enhanced energy density

A key trend in EV battery technology is enhancing energy density. Batteries that can store more energy in the same physical space directly translate into improved range and performance for EVs. BloombergNEF reports a steady increase in the energy density of lithium-ion batteries, averaging around 5-7% annually. 

The Indian government has announced many policies and subsidies to promote electric vehicles in India (Indian Government Initiatives). India's Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme actively promotes the adoption of electric vehicles through various demand and supply incentives, while the Product Linked Incentive (PLI) scheme for advanced cell Chemistry is promoting research in advanced battery technologies, including those enhancing energy density. The scheme is also focused on enhancing the Indian Battery manufacturing ecosystem.

The EV transition in India

• 70% of Tier-1 Indian car consumers are willing to consider EVs as their next vehicle as compared to global average of 52%
• EVs are easier to buy, and they cost the same as ICE. The market is expected to grow to 10-15% by 2030, creating opportunities for car makers, banks, and power companies. (Source)

2. Sustainable materials

A shift towards sustainable and eco-friendly materials, such as responsibly sourced lithium, reduces the environmental footprint of battery production and aligns with India's commitment to cleaner energy. The Ministry of Environment, Forest and Climate Change (MoEFCC) has played a pivotal role in promoting circular economy by formulating policies like Battery-WasteManagementRules-2022, which covers all battery types and makes producers responsible for collecting, recycling, and reusing batteries.

Forecast: Paving the way forward

1. Recycling and circular economy practices

 With the increasing adoption of EVs in India, responsible disposal and recycling of EV batteries has gained importance. A shift towards circular economy practices ensures that end-of-life batteries are efficiently collected, processed, and repurposed. This not only minimises waste but also conserves valuable resources, aligning with India's commitment to sustainability.

2. Affordability and mass adoption

 As technology matures and economies of scale come into play, the cost of EV batteries will decrease significantly. This will make electric vehicles more accessible to more Indians, increasing adoption. According to BloombergNEF, the cost of lithium-ion batteries decreased from approximately $1,000 per kWh in 2010 to about $137 per kWh in 2020.

In 2022, it rose by 7% to $151/kWh, marking the first recorded increase, according to BloombergNEF and remained at $152/kWh in 2023. High lithium and nickel costs are anticipated due to uncertainties surrounding China's post-Covid Zero policy and disruptions in metal supply chains caused by Russia's war in Ukraine.

3. Localised battery production

Encouraging the local production of advanced chemistry cell batteries is pivotal to boosting EV adoption in India. This entails manufacturing EVs and producing their batteries within the country. Such an approach will reduce costs, promote self-sufficiency, and contribute to job creation.

The transition to EVs in India has implications far beyond just OEMs. They are poised to be an integral part of driving India towards a more sustainable future.