The Market for Lithium-Ion Batteries for Electric Three-Wheeler Autos in India
The future of energy lies in renewable resources with significant growth potential, and digital technologies such as the Internet of Things (IoT) and data analytics will play a critical role in enabling EV companies and newer business models to provide the much-needed connectedness and high performance, among other things.
August 16, 2022. By News Bureau
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In India, the Electric Three-Wheeler (E3W) market emerged in December 2012 from the need to provide affordable transportation in many metro cities. They quickly became the go-to mode of transportation for short trips that help fill the mobility gap in public transportation infrastructure in India. The electrification of auto-rickshaws have reduced the operating and maintenance costs making them more economically viable for the owner compared to Internal Combustion Engine (ICE) vehicles. These vehicles are powered by advanced lithium-ion batteries and have emerged as the most viable option for meeting the current energy demands of electric vehicles (EVs).
Growth: Despite the industry-wide slow-down, this is the only sector that is thriving. The lithium-ion battery market in India was valued at USD 1.66 billion in 2020, and it is predicted to grow to USD 4.85 billion by 2027, with a CAGR of 17.23% between 2022 and 2027. Due to its high energy density, low self-discharge, fast charging, and lightweight nature, lithium-ion batteries are the most ideal technology for the fast-paced changes in EV segments. The rising need to reduce air pollution levels, as well as the Indian government incentive schemes to boost manufacturing and the use of electric three-wheelers, are all driving market growth.
In addition, electronic vehicles are seeing exponential growth in India, especially the two-wheelers and three-wheelers segment. Many original equipment manufacturers (OEMs) are encouraged by this growth and are expanding themselves into the production of lithium-ion batteries. The future of energy lies in renewable resources with significant growth potential, and digital technologies such as the Internet of Things (IoT) and data analytics will play a critical role in enabling EV companies and newer business models to provide the much-needed connectedness and high performance, among other things.
Demand: The demand for lithium batteries in E3W is constantly increasing. Even though, lithium-ion batteries are more expensive than previous battery technologies, they have a substantially higher energy density. Apart from that, lithium-ion batteries have a lower rate of self-discharge than other rechargeable batteries, which has led to their rising popularity. As a result, the availability of smaller batteries with higher charge retention has become critical for the energy requirements of electronic vehicles. Furthermore, as E3W become more cost-effective, their use is expanding rapidly across the country. Many manufacturers recognised the untapped potential of these batteries in the Indian market and rushed at the chance to be the first to market the growing demand.
They are collaborating with most of the main car OEMs across the country, with a strong focus on electric two and three-wheelers, which account for a significant share of the auto OEM industry. The business is purely built on the concept of sustainability. Being a responsible alternative energy solution provider, who manufactures eco-friendly batteries that power life and energises the future, the demand curve will be on the rise in the near future as well. Trends: Its lithium-ion phosphate batteries that are used for household storage, remote monitoring, and sensor systems, and are an excellent alternative for solar storage applications. Lithium-ion batteries for E3W have features like long life, high life cycle, safety, and large capacity. For the electric autos and rickshaws, the majority of original equipment manufacturers (OEMs) are opting for swappable and portable battery packs. This has a number of advantages, including faster charging of the batteries and the ability to put more capacity into the vehicle.
In addition, charging a standard E3W battery takes 3-8 hours. If battery swapping technology is implemented, the E3W industry will eliminate a series of limitations. At battery swapping stations, replacing a drained battery with a fully charged battery takes less than 2 minutes. The model will be extremely beneficial to the E3W market, especially e-autos and e-rickshaws because their routes are more standardised, making it easier to pinpoint sites where swapping stations would be in high demand. Moreover, the batteries’ safety and long-term viability are enhanced by advanced technologies such as remote troubleshooting and wireless capabilities, improved performance, and lower costs.
Roadblocks: One major roadblock in India is that it still lacks manufacturing capacity, and relies on countries like China and Taiwan for lithium batteries. Therefore, the battery manufacturers which are the most crucial component of an electric vehicle, are currently facing the greatest challenge. And, unfortunately, India has no domestic source of lithium and cobalt, the key materials needed for lithium cells. Because of the material shortage, manufacturers are force to increase the prices. While the Indian government encourages local manufacturers to switch to electric vehicles, they must also recognise the writing on the wall and strive for a strategic position in the global value chain to diversify their supply channels away from their neighbours. And this is a segment that has developed in India with a lot of cost-effective engineering. We see this as a market in which India can create global leadership in terms of both products and business methods, with the potential to sell to other developing countries.
The country has made a strong start in the adoption of electric vehicles. The availability of finance for OEMs, battery makers, and charging, as well as better infrastructure and customer awareness, will determine the breadth of development. The Indian government has approved ‘The National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ with a budget of `18,100 crores to stimulate domestic cell manufacture and reduce reliance on imports. They are also pushing for a move toward clean mobility, as well as a variety of production-related incentives for local manufacturers. At a time when the “Make in India” and “Digital India” effort is pushing for the country to develop world-class manufacturing infrastructure, it’s critical that this reliance on imports be reduced. Furthermore, the introduction of these favourable schemes is also expected to significantly reduce the cost of consumer electronics manufacturing, making them more affordable to the population living in rural areas of the country where consumer electronics penetration is low. With numerous manufacturers going the EV-way, the country may expect to see EV infrastructure capabilities expand very soon.
Growth: Despite the industry-wide slow-down, this is the only sector that is thriving. The lithium-ion battery market in India was valued at USD 1.66 billion in 2020, and it is predicted to grow to USD 4.85 billion by 2027, with a CAGR of 17.23% between 2022 and 2027. Due to its high energy density, low self-discharge, fast charging, and lightweight nature, lithium-ion batteries are the most ideal technology for the fast-paced changes in EV segments. The rising need to reduce air pollution levels, as well as the Indian government incentive schemes to boost manufacturing and the use of electric three-wheelers, are all driving market growth.
In addition, electronic vehicles are seeing exponential growth in India, especially the two-wheelers and three-wheelers segment. Many original equipment manufacturers (OEMs) are encouraged by this growth and are expanding themselves into the production of lithium-ion batteries. The future of energy lies in renewable resources with significant growth potential, and digital technologies such as the Internet of Things (IoT) and data analytics will play a critical role in enabling EV companies and newer business models to provide the much-needed connectedness and high performance, among other things.
Demand: The demand for lithium batteries in E3W is constantly increasing. Even though, lithium-ion batteries are more expensive than previous battery technologies, they have a substantially higher energy density. Apart from that, lithium-ion batteries have a lower rate of self-discharge than other rechargeable batteries, which has led to their rising popularity. As a result, the availability of smaller batteries with higher charge retention has become critical for the energy requirements of electronic vehicles. Furthermore, as E3W become more cost-effective, their use is expanding rapidly across the country. Many manufacturers recognised the untapped potential of these batteries in the Indian market and rushed at the chance to be the first to market the growing demand.
They are collaborating with most of the main car OEMs across the country, with a strong focus on electric two and three-wheelers, which account for a significant share of the auto OEM industry. The business is purely built on the concept of sustainability. Being a responsible alternative energy solution provider, who manufactures eco-friendly batteries that power life and energises the future, the demand curve will be on the rise in the near future as well. Trends: Its lithium-ion phosphate batteries that are used for household storage, remote monitoring, and sensor systems, and are an excellent alternative for solar storage applications. Lithium-ion batteries for E3W have features like long life, high life cycle, safety, and large capacity. For the electric autos and rickshaws, the majority of original equipment manufacturers (OEMs) are opting for swappable and portable battery packs. This has a number of advantages, including faster charging of the batteries and the ability to put more capacity into the vehicle.
In addition, charging a standard E3W battery takes 3-8 hours. If battery swapping technology is implemented, the E3W industry will eliminate a series of limitations. At battery swapping stations, replacing a drained battery with a fully charged battery takes less than 2 minutes. The model will be extremely beneficial to the E3W market, especially e-autos and e-rickshaws because their routes are more standardised, making it easier to pinpoint sites where swapping stations would be in high demand. Moreover, the batteries’ safety and long-term viability are enhanced by advanced technologies such as remote troubleshooting and wireless capabilities, improved performance, and lower costs.
Roadblocks: One major roadblock in India is that it still lacks manufacturing capacity, and relies on countries like China and Taiwan for lithium batteries. Therefore, the battery manufacturers which are the most crucial component of an electric vehicle, are currently facing the greatest challenge. And, unfortunately, India has no domestic source of lithium and cobalt, the key materials needed for lithium cells. Because of the material shortage, manufacturers are force to increase the prices. While the Indian government encourages local manufacturers to switch to electric vehicles, they must also recognise the writing on the wall and strive for a strategic position in the global value chain to diversify their supply channels away from their neighbours. And this is a segment that has developed in India with a lot of cost-effective engineering. We see this as a market in which India can create global leadership in terms of both products and business methods, with the potential to sell to other developing countries.
The country has made a strong start in the adoption of electric vehicles. The availability of finance for OEMs, battery makers, and charging, as well as better infrastructure and customer awareness, will determine the breadth of development. The Indian government has approved ‘The National Programme on Advanced Chemistry Cell (ACC) Battery Storage’ with a budget of `18,100 crores to stimulate domestic cell manufacture and reduce reliance on imports. They are also pushing for a move toward clean mobility, as well as a variety of production-related incentives for local manufacturers. At a time when the “Make in India” and “Digital India” effort is pushing for the country to develop world-class manufacturing infrastructure, it’s critical that this reliance on imports be reduced. Furthermore, the introduction of these favourable schemes is also expected to significantly reduce the cost of consumer electronics manufacturing, making them more affordable to the population living in rural areas of the country where consumer electronics penetration is low. With numerous manufacturers going the EV-way, the country may expect to see EV infrastructure capabilities expand very soon.
- Samrath Kochar, Founder and CEO, Trontek
Reference-
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