Charging up the Electric Vehicle story…

Battery is the most important component of an Electric Vehicle (EV). The EV era would force a paradigm shift and the fortunes can change dramatically depending on how well they adapt to the new reality.

The EV battery should have the following five capabilities: 1. High energy density – the weight of the battery should not weigh over the performance hence lithium scores over others as it has high energy density 2. Design of the battery should be such that it gives maximum range per charge 3. How fast the battery charges 4.How long the batteries can be used before being replaced 5. The cost at which all the above features come in.

The biggest challenge for the battery manufacturers in India is the sourcing of raw material. Lithium is the key raw material for the batteries to be used in EVs. Most of the reserves for lithium are concentrated in South America (~70%). Chile’s Atacama Salt Flat is home to the world’s largest lithium carbonate reserves. Global demand for lithium carbonate is projected to more than triple from 188,000MT in 2016 to 611,000MT by 2035 as per reports. Private entities like the battery manufacturer along with the government need to do strategic investments in these mines for sourcing lithium. As the interest in lithium keeps going up, there would be more exploration to find fresh deposits. Lithium could become the “white gold” for the industry in future. Cobalt is another mineral resource often used in lithium-ion chemistry that could come under strain as EV demand grows.

The choice of a battery design and the chemistry depends on the vehicle type for which the battery is being made for. The industry as of now is getting itself ready with various technologies to provide the optimum source of power to an EV and reduce the price difference between an EV and an internal combustion engine (ICE) vehicle. There are also debates going on regarding the optimal format for charging infrastructure. Discussions revolving around swapping of batteries vs charging station are still on. Each of these methods has its own merit.

Currently the Central Electrochemical Research Institute (CERI) in Tamil Nadu is working on lithium-ion manufacturing in India and has targeted a capacity of 100 units/day. Bharat Heavy Electricals Ltd (BHEL) has entered into a MOU with the Indian Space and Research Organization (ISRO) to develop lithium-ion batteries & Suzuki announced a $184 mn investment for a factory with partners Toshiba Corp. and Denso Corp. in April 2017. How the two leading battery manufacturers in India, Exide Industries Ltd & Amara Raja Batteries Ltd adapt & scale up technologies also needs to be seen.

Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named ‘The Tortoise’

Author: Sabyasachi Paul

The Author has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata. He also manages a portfolio on the online platform Kristal. Find link to the strategy named 'The Tortoise'

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