Chennai: The supply of Lithium-ion batteries is expected to exceed demand with manufacturers committing Rs 75,000 crore investments to increase capacities to 150 GWh by 2030, more than double that of the expected demand. The increasing supply also saw Lithium-ion battery pack prices decline by 20 per cent in 2024. Electric vehicle penetration across automotive segments is expected to increase exponentially over the next five years, spurred by government support, enhanced awareness and increasing product launches. Given that the battery is the most critical and costly component of an EV, accounting for 35-40 per cent of the cost, battery cell manufacturing has garnered a lot of attention in recent times. The demand for Li-ion battery cells for EVs in India is expected to reach 11-13 GWh by the end of FY2025 and 60-65 GWh by FY2030. Apart from EVs, Li-ion batteries are also likely to attract demand from stationary applications. Several entities have committed significant investments in the Li-ion battery cell segment in India. With investments exceeding Rs 75,000 crore for committed capacities, over 150 GWh of Li-ion battery cell capacities are to become operational by 2030. Some of the localisation is through technology transfers or alliances with overseas battery cell players. India currently remains dependent on imports to meet its Li-ion battery cell requirements, with domestic capabilities limited to battery pack assembly with China dominating the ecosystem both in terms of raw material processing and manufacturing capacities. Increased supply saw lithium-ion battery pack prices have declined over the years, with 20 per cent decline in 2024. Prices are expected to come down further with the global li-ion battery supply outpacing demand over the medium term.
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