Search by: Lithium Ion Battery Assembly Plant

The Government of India (GoI) recently announced plans for India's transition to all electric public transportation by 2030. Lithium-ion Batteries (LIBs) and related components account for about 40–50% of an EV’s total cost. The government’s ambitious targets for EVs and Renewable Energy (RE) are expected to create a huge demand for LIB systems in the coming years. However, at present, India lacks domestic manufacturing capacity at commercial scales and imports LIBs, mainly from China and the US.

As per the Charging the future: Asia leads drive to next-generation EV battery market report (Goldman Sachs, 2016), BYD has the largest LIB manufacturing facility, with an annual capacity of 6 GWh, followed by Nissan AESC (5 GWh), Loitech (1.5 GWh) and A123 (1.4 GWh). The capital expenditure (CAPEX) per capacity varies according to the capacities of these plants. With further developments in technology, better optimisation of manufacturing plants and implementation of government subsidies, the cost of LIBs can be reduced significantly in the future.

Currently, the demand for LIBs in India’s clean energy sector is modest. However, it is expected to increase several folds in the coming years because of the ambitious EV and RE targets.

Financial Model

The initial capital requirement, determined by the land and building requirement, is about 5%. The capital requirement for plant and machinery is about 82%, preliminary and pre-operative expenses would be about 7% and remaining is capitalised interest. We have assumed a 70:30 debt to equity ratio. The input components are capital cost, raw material costs, operations costs, etc., and the output is calculated in terms of battery manufacturing cost (RS/kWh). The manufacturing cost includes materials, labour, energy, depreciation, Selling, General & Administrative (SG&A), etc.