Basic processing of lithium-ion metal is a major challenge for the Indian electric vehicle (EV) industry as there are no such domestic facilities yet, according to Society of Indian Automobile Manufacturers (Siam) president Vinod Aggarwal.
"Processing still happens only in China or other countries," Aggarwal said at the Economic Times Auto EV Conclave in New Delhi earlier this week. "So therefore our dependence on import of this commodity is the biggest challenge which will always hit us as far as pricing is concerned."
Battery costs have nevertheless fallen by about 30pc from $200/kilowatt to $140/kW, Aggarwal said.
"We are also talking of assembly of battery cells here," he said. "Once that starts happening, maybe there will be some further reduction [in prices]." But Aggarwal did not provide a timeline for starting the assembly of battery cells.
India has imported a large quantity of lithium cells and batteries so far this year, with 39mn from Hong Kong, 33mn from China and 10mn from Indonesia. India launched the first round of its auction for developing critical and strategic minerals such as lithium and nickel last month.
India found its first significant deposit of lithium in Reasi town, Jammu city and Kashmir state in February. Deposits were also subsequently found in Rajasthan state. But no cobalt or nickel ores have been discovered yet, while the lithium found in Jammu and Kashmir has yet to be mined.
The Indian government has targeted for EVs to represent 30pc of new car sales by 2030, but cut the demand incentive provided under the Faster Adoption and Manufacturing of Electric Vehicles-II (Fame-2) scheme to 10,000 rupees/kWh ($120/kWh) from 1 June, down from Rs15,000/kWh earlier. Automakers are now seeking an extension of the subsidy scheme.
Indian EV makers sold 139,421 units in October, up by 8.7pc from September and by 19pc from October 2022 as the market shook off the impact of the subsidy cut, data from the government's Vahan website show. But this accounts for only around 6.5pc of overall automobile sales in India in October.
