NEW DELHI: RC Bhargava, Chairman of Maruti Suzuki India Ltd (MSIL) said that dependence on China for raw materials (primarily lithium) is the primary reason why companies are not interested in manufacturing battery cells in India. Bhargava also cited the high capital required to set up a cell manufacturing facility as another reason why investors shy away from manufacturing cells required in electric vehicles.
"Nobody is making battery cells in India. One of the problems of EVs today is that people are packaging the cells into batteries, but actual production of cell is not taking place in India,” said Bhargava on the sidelines of an event which marks beginning of exports of Maruti Suzuki’s first electric vehicle e-VITARA to 100 countries, and also the inauguration of production of lithium-ion battery cells for strong hybrid electric vehicles at its facility here.
With an estimated 70–77% share of the global market, China dominates EV battery manufacturing. This control stems from its mastery of the entire supply chain, from raw material mining and processing to the production of components and final assembly.
Bhargava stated that setting up plants for the production of battery cells is a very capital-intensive proposition. Citing industry estimates, he said it could cost about Rs 20,000 crore to put up a battery plant.
"The raw material (lithium) is a problem. If I put up a plant, if the raw material is not available to me, as an investor, what is my risk given the raw material is controlled by one supplier?….the risk is very high…That is possibly one of the factors which is making people stay away from making investments in battery manufacturing in India,” he stated.
Commenting on the rare-earth magnet shortage caused by Chinese restrictions, another critical area where China controls the supply chain, Bhargava said that it was a “warning signal”. He, however, expressed confidence that the issue is likely to be resolved amid improving relations between India and China.
When asked if MSIL or parent firm Suzuki Motor Corporation is exploring partnerships with other firms to solve the raw material problem, Bhargava said, "Either you partner with a Chinese company, give them majority and let them set up, and they assure you the supply of raw material, but so far no one has done it yet."
Maruti Suzuki's subsidiary TDS Lithium-Ion Battery Gujarat Pvt Ltd (TDSG) has become the first company in India to achieve electrode-level localisation of lithium-ion battery cells. It has started manufacturing of the first lithium-ion battery, cell and electrode for a strong hybrid electric vehicle at the facility here.
MSIL also did not give a timeline for the launch of its first EV - the e-Vitara in India. Bhargava said that apart from meeting export order obligations, cost factors have played a part, as the price of the EV is still on the higher side in India. According to the company, e-Vitara’s export order book stands between 50,000 and 1 lakh units.
Manufactured at Suzuki Motor Gujarat (SMG), a unit of Maruti Suzuki India, the first batch of export-bound e-VITARA will be shipped from Pipavav port to the European region, including the United Kingdom, Germany, Norway, France, Denmark, Switzerland, Netherlands, Sweden, Hungary, Iceland, Italy, Austria, and Belgium.