Investments in cell manufacturing to help reduce EV costs: ICRA

Investments in cell manufacturing to help reduce EV costs: ICRA

New Delhi, September 3 (KNN) Investments in the manufacturing of electric vehicle (EV) cells are expected to exceed Rs 70,000 crore by 2030. This will also help reduce the costs of EVs, according to the ICRA report.

“In electric vehicles, advanced chemical batteries remain the most critical and expensive component, accounting for nearly 35-40% of vehicle price, to achieve large-scale electric vehicle penetration and cost structure. India will need to create its own local battery cell development eco-system,” said Shamsher Dewan, Senior Vice President and Group Head – Business Valuations, ICRA in the report.

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Moreover, since the penetration of charging infrastructure will only improve gradually, improvements in energy efficiency remain imperative, he added.

“The ability of battery manufacturers to enter into agreements/alliances with value chain actors to mitigate these risks, coupled with the creation of a robust framework for recycling, would remain critical,” the report said.

Unleashing the country’s potential to manufacture its own cell batteries, the government recently signed agreements with three companies for incentives under its Production Linked Incentives (PLI) program for storage of advanced chemical cell batteries. (ACC).

The policy lays emphasis on enhancing domestic value addition and should support capacity development in this sunrise.

While lithium-ion batteries have become the battery of choice for electric vehicles, given their high energy efficiency, decent thermal stability and low self-discharge, lithium nickel manganese oxide (NMC) is the chemistry currently the most widely used cathode.

ICRA expects that lithium iron phosphate (LFP) chemistry will also gain more acceptance in the future, given its higher thermal stability and lower cost of production. (KNN Office)

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