It is anticipated that the battery manufacturer will invest approximately Rs 1,200 crore in the lithium-ion battery sector this financial year.
Amara Raja Energy & Mobility Ltd, a leader in battery technology and India’s largest manufacturer of lead-acid batteries, has unveiled ambitious plans to expand its New Energy Business. The company intends to invest more than Rs 1,000 crore during the fiscal year 2026, focusing on the research, development, and manufacturing of lithium-ion (Li-ion) cells.
This initiative is in response to the burgeoning demand for Li-ion batteries, which are increasingly favoured for electric vehicles. As part of this strategic push, Amara Raja is establishing a state-of-the-art Gigafactory in Telangana through its New Energy Business unit. The facility, which represents an estimated investment of Rs 9,500 crore, will bolster the company’s Li-ion battery production capabilities.
By the end of the current financial year, Amara Raja’s cumulative investment in its Li-ion cell business is expected to reach approximately Rs 1,200 crore. The company’s chief financial officer, Delli Babu, during a recent post-earnings call with investors, indicated that further investments of at least Rs 1,000 crore are planned for the next fiscal year, contingent on the procurement of necessary equipment.
The new Gigafactory is anticipated to achieve a substantial scale, with a projected capacity of 16 GWh for Li-ion cells and an additional 5 GWh for battery packs over the next decade. The facility’s inaugural phase, focusing on battery packs, has already launched with a capacity of 1.5 GWh.
Industry publication Autocar Professional has noted that Amara Raja is considering a significant expansion of its proposed cell manufacturing capacity to over 25 GWh annually, aiming to secure a competitive edge in the global market. Initially, the Gigafactory will commence commercial production of cells using Nickel Manganese Cobalt (NMC) chemistry, predominantly for two-wheelers, by the end of 2026. Furthermore, the company is exploring an initial capacity of 4-6 GWh for cells based on lithium iron phosphate (LFP) chemistry, which is favoured for its thermal stability, longevity, and cost-effectiveness.
LFP cells are poised to meet nearly 75-80% of the market’s future requirements, according to the company’s management, while NMC cells will cater to a smaller segment. Amara Raja’s strategic partnerships include collaborations with a Chinese firm for developing an NMC-based 2170 cylindrical cell and with Gotion-InoBat-Batteries for the production of LFP cells.
Recent collaborations have also been formed with Ather Energy and Piaggio India, for whom Amara Raja will supply Li-ion batteries. Although the company is currently financing these initiatives through internal accruals, it is open to exploring additional funding options, such as equity sales or borrowing in the future.
Amara Raja’s advancements come at a time when its competitor, Exide Industries, is also gearing up to invest around Rs 1,000 crore in Li-ion cell manufacturing and battery solutions, with the first phase of its Gigafactory expected to become operational next year, starting with a capacity of 6 GWh.
