India’s EV ambitions could stumble on lack of lithium

HOME TO SOME OF THE MOST POLLUTED CITIES ON THE PLANET, INDIA IS PIVOTING TOWARDS NEW-ENERGY VEHICLES TO CLEAN UP ITS AIR

MUMBAI: India’s ambition of becoming a global hub for making electric vehicles (EVS) faces one major hurdle: its lack of access to lithium.

Home to some of the most polluted cities on the planet, the South Asian nation is pivoting towards new-energy vehicles to clean up its toxic air. But with meagre resources of lithium, the mineral essential to make batteries for electric vehicles, it is having to scour for resources overseas.

India’s EV production will rely on imports from China of lithium chemicals used to make cathodes and battery cells, according to Jasmeet Singh Kalsi, director at Manikaran Power Ltd, which is exploring setting up India’s first lithium refinery. “China has a thriving lithium chemical, battery cathode, battery cell and EV supply chain. India has none.”

PM Modi’s administration unveiled a slew of measures in 2019 to promote the clean-energy vehicles, including a $1.4 billion plan to make India a manufacturing hub for EVS and cutting taxes to spur purchases. While electric cars in India remain a small segment, with an estimated 3,000 sold in 2018 compared with the 3.4 million fossil fuel-powered cars in the same year, the nation is forecast become the fourth-largest market for EVS by 2040, when the segment will comprise nearly a third of all vehicles sales, according to Bloombergnef.

Several plans are under way to build lithium-ion battery factories in India. Meanwhile, China is dominant in the battery supply chain. Around three-quarters of battery cell manufacturing capacity is in China, and Chinese companies have unparalleled control of required domestic and foreign battery raw materials and processing facilities, according to BNEF.

“Indian companies have been involved in trying to prospect for stakes in overseas resources, and possibly on-shoring more raw materials production capacity in India,” said Sophie Lu, head of metals and mining for Bloombergnef. “But there are very little synergies right now because further up the value chain, battery components manufacturing capacity does not seem to be planned extensively for India.”