Affordable Electric Vehicles Still Out of Reach in India
Even though more people in India want electric vehicles (EVs) and many Indian companies are trying to make them, the prices of these EVs are not expected to drop soon. This is mainly because many parts of these vehicles, especially the batteries, are bought from other countries.
Even if India starts making its batteries, it might not make the vehicles cheaper right away. Experts say that this is because the materials needed to make batteries are still being brought in from other countries, which keeps costs high.
Prabhudas Lilladher automobile analyst Himanshu Singh mentioned that even though we might start making some parts in India, the main cost comes from materials that we still need to buy from abroad. Another person in the industry pointed out that battery makers don’t make a huge profit, so just making batteries in India won’t drastically cut costs.
However, Harshvardhan Sharma, head of Nomura’s auto retail practice, thinks that lowering import duties and shipping costs for batteries from South Korea and China could lower cell prices and that as domestic production volumes rise, companies may experience economies of scale that further cut costs.
Priyadarshi Panda, who co-founded a battery company, that the company will sell batteries to potential customers at the same price that rivals like Ola Electric, Ather Energy, TVS Motor, and others are offering. IBC recently revealed plans to construct a lithium-ion cell manufacturing facility in India.
He would not provide specific figures, but stated that volume is the first item the company is negotiating on and that, depending on volume, it will match other cell providers’ prices; for larger volumes, it will supply cells at a baseline price because it is certain that it will be able to make a profit by doing so.
Currently, India relies a lot on China for important EV parts like batteries. This reliance is a concern because it means Indian companies don’t have full control over the quality of these parts, which can be a problem given India’s tough roads and weather conditions.
There is a long way to go until lithium-ion cell industries are built in India, but everyone has announced ambitions to do so, including well-funded companies like Reliance Industries, Tata Group, and Suzuki, as well as established battery companies like Amara Raja and Exide and more recent entries like Log9, Godi, and Nsure.
Some companies in India, like Ola and Reliance, are already working on building large battery factories, aiming to boost the country’s ability to make batteries. However, an industry expert noted that the challenge isn’t just about making a few batteries but about making a lot of them efficiently and affordably.
China dominates the global production of many key battery parts, making it a tough competitor. Even Tesla, a major electric car maker, finds producing batteries on a large scale challenging.
In summary, making EVs cheaper in India involves not just making batteries locally but also dealing with high material costs, improving manufacturing efficiency, and reducing dependency on imports. It’s a complex issue that requires time, investment, and innovation.