When the whole world is busy playing power games over capturing lithium mines, Indian manufacturing industry is still showing very dull response towards this new age technology. Though the companies are investing heavily in research, none are bullish about mass manufacturing the Li-ion batteries.
The slowdown trend and the stubbornness about lead acid batteries
Growth has been quite slow for the automobile sector since 2018, and since then, has been aggravated by the pandemic. At the same time growth of electric vehicles and especially two wheelers and three wheelers have increased substantially over the past one year.
The big question in this scenario is whether the battery sector is prepared for this growth?
Given the long existence of lead acid batteries and the heavy investment needs of Li-ion battery set up, automobile companies have been slow in taking any action and are depending largely on external investors to inject into EV business.
Though the battery manufacturers like Excide and Amara Raja are unanimously sharing views on sustenance of lead acid batteries for decades to come, Tata and Maruti, the two automobile giants are seen taking opposite paths. Maruti have chosen to pass the EV wave and concentrate on their core business whereas Tata group is seen taking the EV business seriously by raising billion dollars from an external investor. The high returns on Tata stock are nothing but an indication for all those who are reluctant on investing in the EV segment.
Current scenario and industry response
While the companies have accepted the shift to EVs, they still remain cautious about moving in too early. Reasons for this bearish growth could be
The pace of EV adoption, though rapid, is not enough to establish a large-scale manufacturing base in the country.
Few studies on cost of ownership have reported the EVs to be costlier than ICE vehicles at least for some segments, obviously shifting preference from EV to traditional cars.
Other competing battery technologies that could be adopted by the sector.
The EV market is still in its initial stages, the technology is still evolving and the performance matrix is not fully researched yet, so unless there is a clarity of demand, it would be optimistic to expect companies to spare their capex on manufacturing of Li-ion batteries.
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(Swarajyamag Nov.21,2021)
