Building upstream lithium-ion cell value chain in India

As the global demand for electric vehicles (EVs) continues to surge, India is focusing on bolstering its lithium-ion cell manufacturing capabilities. In a recent panel discussion hosted by EVreporter, industry leaders shed light on the critical steps needed to develop a robust upstream lithium-ion cell value chain in the country. The panel, moderated by Preetesh Singh (Manager – CASE & Alternative Powertrain at Nomura Research Institute), included insights from Vikram Handa (MD – Epsilon Advanced Materials, Harin Kanani (MD – Neogen Chemicals), and Anjani Sri Maurya (Founder – Altmin). Here’s an excerpt of our takeaways from the session:

• Localizing Anode Manufacturing

Vikram Handa of Epsilon Advanced Materials discussed the company’s strategy to localize anode manufacturing. Initially planning a 10,000-ton synthetic graphite plant, Epsilon has upgraded its plans to establish 30,000-ton capacity in the first phase. Vikram pointed out the current lack of large-volume customers in India, leading the company to focus on exports and global cell players.

Vikram also emphasized the need for state and central government incentives, particularly towards high Capex and power costs.

• Investments and Progress in Cathode Manufacturing

Anjani Maurya from Altmin discussed their plans for a phased investment of $100 million in cathode material manufacturing, targeting a 10 GWh capacity by 2030. The first phase, with a 5 GWh capacity, is set to begin production in Hyderabad within 18 months. Maurya emphasized that the real bottleneck lies with cell manufacturers finalizing their technology choices and raw material specifications rather than with material manufacturers.

He highlighted three key challenges they face as a cathode manufacturer:

– Lack of Demand Clarity – Uncertainty in battery chemistry and pricing benchmarks.

– Limited Government Support – Current PLI schemes favour cell manufacturers. However, the manufacturers of upstream components like cathodes, anodes and electrolytes do not have any incentive program at the moment. Maurya suggested extending incentives to these segments to create a comprehensive ecosystem.

– Raw Material & Pricing Issues: He urged Indian companies to move away from benchmarking costs to global indices and instead focus on creating a reliable domestic supply chain.

• Advancements in Electrolyte Manufacturing

Harin Kanani from Neogen Chemicals shared insights into the progress of electrolyte manufacturing. Neogen has scaled its production to thousands of kilograms since it started two years ago. The current plant can produce 2,000 metric tons, supporting 3-4 GWh of cell production. Neogen is also developing its electrolyte salt manufacturing capacity, aiming to achieve 30,000 tons annual production by the end of 2025.

Harin highlighted the strong interest from international customers seeking alternatives to Chinese suppliers, underscoring the need to purify technical-grade solvents to battery-grade and scale up additive production.

• Supply Chain Challenges and Solutions

– Geopolitical and Market Challenges – Vikram Handa discussed the impact of China’s export restrictions on graphite, emphasizing the need for India to develop its own refining and processing capabilities. He highlighted the importance of collaboration with countries like the US to secure a diversified and resilient supply chain.

– Pricing and Competitiveness – Harin Kanani pointed out that China’s cost manipulation poses significant challenges for Indian manufacturers. However, he noted that international customers are increasingly prioritizing supply chain security over cost, creating opportunities for Indian companies to position themselves as reliable alternatives.

• Role of Government Policies

– PLI Scheme Limitations – Panelists emphasized that while the Production-Linked Incentive (PLI) scheme has benefited cell manufacturers, upstream components like cathodes, anodes, and electrolytes need targeted support.

– State-Level and Central Incentives – Vikram Handa appreciated the state-level incentives for manufacturing but called for more centralized policies to ensure long-term competitiveness. He advocated for a FAME-like scheme where benefits are provided post-manufacturing to encourage localization.

– Raw Material Security – Harin Kanani applauded the government’s decision to exempt basic customs duties on critical minerals but stressed the need for clear policies on duties and taxes for cell manufacturers to align strategies across the value chain.

– Support for Export – Harin emphasized the need for export incentives to boost India’s position in the global battery materials market.

• Future Outlook and Collaboration

– Diversifying Supply Chains – Panelists agreed on the urgent need to diversify raw material supply chains. Maurya mentioned Altmin’s project in Brazil to refine and produce 32,000 tons of lithium carbonate by 2026, which will help reduce reliance on China. Recycling was also identified as a promising solution to source critical materials like nickel and cobalt.

– International Partnerships – Vikram highlighted opportunities for India to collaborate with the US on building graphite and anode capacities. He noted that Indian companies’ manufacturing strength, combined with US technology and investment, can create a robust alternative to Chinese dominance.

– Scaling Innovations – Harin shared Neogen’s plans to develop battery-grade solvents and additives locally, further reducing dependency on imports.

From the perspective of battery materials companies, positive developments this year include:

– Nash Energy and Ola Electric started producing cells locally in India.

– A couple of more Indian cell manufacturers are expected to start cell production in 2025.

– International companies are seeking alternatives to China to secure their supply chain.

Conclusion by Preetesh Singh: “The panel discussion underscored India’s potential to become a global leader in the lithium-ion battery value chain. However, achieving this vision requires a coordinated approach involving industry stakeholders and policymakers. By addressing challenges in raw material sourcing, incentivizing upstream manufacturing, and fostering international collaborations, India can build a sustainable and competitive battery ecosystem that meets both domestic and global demands.”

Also Read: Lithium-ion cell manufacturing and value chain | Current landscape in India