Epsilon’s anode manufacturing plans and recommendations to support component manufacturing in India

Epsilon Advanced Materials is establishing an anode manufacturing facility in Karnataka and Finland and has announced plans for another facility in the United States.

This write-up (with inputs from Vikram Handa – Managing Director, Epsilon Advanced Materials) provides an update on their manufacturing plans and recommendations for enabling cell component manufacturing in India.

Setting up in Karnataka

Epsilon already produces meso-coke, an anode precursor, in Karnataka, which is supplied to Chinese anode manufacturers. Their decision to establish its anode manufacturing plant in Karnataka is underpinned by proximity to raw material. The company plans to construct a 100,000-ton synthetic graphite plant here, which would cater to anode requirement for as much as 100 GWh cell capacity. This integrated complex will be powered by renewable energy sources and emphasise circularity in managing byproducts.

Strategic Entry into the US Market

Component manufacturing needs a certain scale to be cost-effective. Unlike the Indian market, where cell manufacturing is still nascent, the United States market offers more immediate demand for anode material. Epsilon recognises that waiting for Indian cell players to scale up would not align with its manufacturing aspirations. As its Karnataka unit starts to produce anode materials at a commercial scale in 2025, Epsilon aims to primarily export the product to prominent OEMs and Korean cell manufacturers in the US. This will also enable Epsilon to supply Indian cell manufacturers at competitive prices when they eventually scale up their requirements. Future plans include building a manufacturing facility in Finland to cater to European demands and the United States to meet local demand there.

Taking Inspiration from China’s Success

Chinese cell manufacturers, such as CATL and BYD, benefited from a clear government policy that laid out a roadmap for the transition to electric vehicles and the accompanying battery demand. This clarity allowed these companies to engage proactively with their suppliers and guide them toward scaling up operations. In contrast, India’s cell makers are currently developing their own roadmaps. To accelerate the progress of the entire ecosystem, cell manufacturers must engage with material suppliers in tandem with their planning efforts.

Policy Support for Cell Component Manufacturing

The battery materials processing sector presents a critical bottleneck in building a domestic cell value chain. Establishing materials processing facilities requires substantial capital expenditure. Cell manufacturers depend on suppliers to deliver consistent, high-quality components at a commercial scale. The financial burden of reaching the customer qualification stage can be challenging, and this is where government support can make a substantial difference. Gap funding provided by the government can assist suppliers in achieving qualification, subsequently allowing them to enter the long-term supply chain of cell manufacturers.

In the United States, IRA offers substantial support for building local sourcing capabilities. India could explore similar strategic partnerships, enabling Indian suppliers to US companies to benefit from incentives the US government offers.

Also Read: Epsilon Group acquires Cathode Active Material tech centre in Germany

This article was first published in EVreporter Oct 2023 magazine.