India's EV plans could make it a global battery hub, says Niti Ayog
23 November 2017
India's move towards having only electric vehicles (EVs) on its roads by 2030 could create a $300-billion domestic market for EV batteries and is an opportunity for battery manufacturers under the government's 'Make in India' campaign, according to a study by government think-tank Niti Aayog in conjunction with the Rocky Mountain Institute of the US.
The ambitious EV plan would require at least 3,500 GWh of batteries worth of Rs20 lakh crore from 2017-2030, the report said.
''India's mobility transformation presents an enormous economic opportunity for India. Innovative business models and supportive policy frameworks can help make India a global hub for manufacturing electric vehicles and their components, accelerating this transition while creating jobs, strengthening Indian industry, and cleaning the air,'' said Amitabh Kant, chief executive of NITI Aayog.
The sub-continent would account for two-fifths of global EV battery demand by 2030 and the shift to the clean energy fuel could necessitate an investment of $100 billion to set up 20 giga factories to produce batteries, based on current costs, the study estimated.
According to the report, 25 to 40 per cent of the EV battery market and around 40 per cent of the global battery demand could be captured through the 'Make in India' initiative.
NITI Aayog also batted for a 'feebate' policy to support the automobile sector's transition to the mass production of electric vehicles, under which inefficient vehicles could incur a surcharge, while efficient vehicles could receive a rebate.
The think tank said that the competition created by India's EV demand could bring down global battery prices by 16 per cent by 2030.
As the battery currently accounts for almost one-third of an electric vehicle's cost, reducing the cost of the battery by scaling production and standardising components could also bring down the price of an EV.
An example of a gigafactory Tesla Inc's battery manufacturing facility in Nevada, USA, which has a total manufacturing capacity of 35Gwh per annum and required an investment of $5 billion.
The report, titled India's Energy Storage Mission: A Make in India opportunity for globally competitive battery manufacturing, said the country's ambitious target for EVs is a ''game changer and its achievement could drive down costs and build production scale faster than anticipated in existing projections''.
Rocky Mountain Institute managing director (India) James Newcomb said while the global energy transition is already under way and moving with breathtaking speed, many forecasts have not taken into account India's ambitions in mobility.
''India has an opportunity not only to become one of the largest electric vehicle markets in the world, but also to support electric vehicle adoption globally,'' he added.
The report estimated that based on historic learning rates, demand for EV batteries in India could drive down global battery prices by as much as 16 per cent to $60 per KWh by 2030 as compared to projections that do not include India's EV goals.