Abstract:

India’s commitment to the EV30@30 global initiative, which targets a 30% new sales share for electric vehicles (EVs) by 2030, translates to the addition of about 24 million two-wheelers, 2.9 million three-wheelers, and 5.4 million four-wheelers to the fleet in the next 10 years. At the same time, India remains heavily reliant on the international market for EV components, especially battery cells. The government is thus increasingly focused on promoting domestic manufacturing and recently announced a five-year, US$19.7 billion production linked incentive scheme for 10 key sectors that includes US$2.4 billion for advanced chemistry cell (ACC) batteries. This working paper estimates the battery capacity that would be required to power India’s EVs, by year, up to 2035, under the EV30@30 scenario and a separate Ambitious uptake scenario. This analysis shows that, by 2035, India will need about 3,400 gigawatt hours (GWh) of lithium-ion batteries under the 30@30 scenario and about 4,100 GWh under the Ambitious scenario. This compares to the approximately 198 GWh that were produced worldwide in 2017 and highlights the need for India to set up its own giga-factories in the next few years. In the next decade, India’s annual requirement could be 17% to 26% of annual global production. Giga scale production is also a crucial part of lowering the price enough to make EVs cost competitive, and robust domestic manufacturing can have far-reaching benefits for the economy.