The report indicates that by offering substantial production-linked incentives for ACC batteries, auto components, and electric parts, import dependence will decrease as domestic production is stimulated.
The anticipated rise in Electric Vehicle (EV) production in India is significant, with projections of an eleven-fold increase to 9.7 million units by 2027-28. This surge is attributed to factors like rapid urbanization, high petroleum prices, declining battery costs, pollution concerns, and supportive governmental incentives, as detailed in a recent report.
The significant milestone of 1 million EV registrations in India was recently achieved. In collaboration with AVALON CONSULTANCY, the PHD Chamber of Commerce and Industry published this enlightening report titled “Charged for Success: India’s EV Landscape.”
The report underscores the effectiveness of substantial production-linked incentives related to ACC batteries, automotive parts, and electronic components in curbing imports by spurring local production.
A pivotal component of EVs, the lithium-ion battery cell, which makes up about 40% of the total EV expenditure, has seen a drastic 90% price reduction over the past ten years, now priced at USD 137/kWh. This drop is largely due to the growing acceptance of EVs and innovations in high-energy-density cathode technology.
In financial terms, the report anticipates the EV-specific component market to grow from USD 1.25 billion in FY23 to a whopping USD 13 billion by FY28. Dominating this segment are battery packs, followed by motors, BMS, and motor controllers. The projected demand trajectory for battery packs is steep, expected to soar at nearly 100% CAGR to 29.5 GWh in 2025-26 and subsequently increase by 50%, reaching 152.3 GWh by 2029-30.
A corresponding rise has been forecasted for critical minerals vital for EV production. However, the production of these essential minerals is primarily concentrated in a few countries, including China, Japan, Australia, Chile, the USA, and the EU. This raises concerns over supply chain stability.
Given India’s heavy reliance on imports for critical minerals like lithium, cobalt, nickel, aluminium, and copper, its recent inclusion in the Mineral Security Partnership (MSP) and identifying 30 crucial minerals are strategic moves. These initiatives aim to diminish reliance on imports and fortify supply chains.
Lastly, the report discusses the golden opportunities awaiting in the growing Indian EV market. Short-term prospects lie in exports, while medium-term opportunities could emerge from foreign direct investments or potential joint ventures.
