India Has Huge Opportunity In Exporting Battery Chemicals

Srinjoy Bal
05 May 2023
10:46 AM
3 Min Read

Epsilon Advanced Materials aims to start commercial production in March 2025 at its Karnataka plant and will export most of the supplies to the US and European markets.


Epsilon Advanced Materials

Epsilon Advanced Materials, a subsidiary of Epsilon Carbon, intends to begin commercial production of synthetic graphite anodes for cells in March 2025, confirmed the company's Managing Director, Vikram Handa.

The company, established in 2018, announced its plans to set up its first manufacturing facility in Karnataka in 2022 with a planned investment of INR 9000 crore. 

During an interaction with Mobility Outlook, Handa said the company has so far invested almost INR 500 crore as part of its plan in material development, which is getting to a production-ready scale, land acquisition, land engineering and environmental permits. Construction will commence in September 2022. At the end of ten years, the plant will have a cumulative capacity of 100,000 tonne of synthetic graphite. However, it will have a capacity of 1,000 tonne in the first phase and will gradually increase as per the market demand in the next ten years, he added.

In addition, the company also plans to set up two more facilities in Finland and the US by 2030, which will double the capacity of the India plant.  

The plant in India will export about 90% of the capacity to the US and the European OEMs. Since inception, Epsilon Advance Materials has qualified as a material supplier to 45 OEMs globally, Handa said.

The company uses the waste gas from the carbon black business for generating power, and the new plant will fulfil 90% of its energy requirements using renewable sources. “The US and European OEMs are concerned over the manufacturing process of their raw materials and we want to serve them with materials manufactured with lower carbon emission processes and this is where the Indian greenfield plant comes in,” he said. However, the Indian customers are not so concerned with the carbon emission of the supplier at this point, he added.

China+ 1: A Key Strategy

Handa noted that 95% of anode materials are currently made in China. Besides, out of the 1000 gigawatt-hour battery capacity, 80% is made in the country. He added that even with sanctions on China, it is impossible to ignore the country in this field because of its maturity in the sector.  

What Epsilon aims to do is to leverage China+ 1, he added.  

Dr Rahul Walawalkar, President, India Energy Storage Alliance and MD, Customised Energy Solutions India, noted that the opportunities for a country like India lie ahead in this scenario where the requirement for batteries is increasing every day. 

He noted that while the estimated requirement for batteries by 2030 is at 5,000 gigawatt-hour, the opportunity for India is to scoop up the market share in the sector as the market grows. However, by the end of the decade, China is still expected to dominate the market with at least a 60% share. 

Walawalkar noted that the idea is not to compete with China on the price game as the scale there is much higher, but rather look at the opportunity of supplying components manufactured with sustainable processes as most of the OEMs across the world are now looking at sustainable manufacturing process as one of the key criteria.

Epsilon Advanced Materials

Western Inflation: A Bliss For India

Inflation worldwide is no new surprise, especially in the West. So to get around the problem, the US government introduced the Inflation Reduction Act (IRA) in August 2022 to spur investments in domestic manufacturing capacity, promote domestic or free-trade partner purchases of essential supplies, and jump-start research and development and commercialisation of cutting-edge technologies like carbon capture and storage and clean hydrogen.

Handa noted that under the act, every e-vehicle maker in the US gets a benefit of $7,500 in total from the Government, $3,750 if the vehicle is being made in the US and $3,750 if the battery minerals are sourced from the country or the FTA (Foreign Trade Agreement) countries including Australia, Chile, Morocco and Canada among others. He believes that this is where the right opportunity for India lies. While India is not an FTA nation to the US, the country can leverage the partnership with Australia to enter the US market for battery and battery minerals. Dr Walawalkar noted that while Australia can supply the raw materials and India can aid with the processing of these raw materials.

Moreover, the US government is also negotiating with other nations that are not under FTA to sign a deal with the OEMs, the most recent addition being Japan. Handa noted that this is the right time to get into negotiations with the US “because if we miss this window, the next window starts after the US 2024 election, which would be too late,” suggested Walawalkar. He added that while the US Department of Energy is keen on partnering with India, “still some fine tuning is required for the Indian suppliers to get to the scale and quality.” 

Ripping At The Right Time

The IESA President believes that the PLI scheme was the right boost for the industry to get into local manufacturing of components. However, expecting the final products to be ready immediately is a big ask. He noted that it takes a minimum of two to three years to be set up and established in this industry. “We expect the real action on the ground to happen only after 2025,” he said.

Currently, the biggest challenge in the industry is recruitment. He noted that while there are some talented individuals in the sector, companies are poaching each of them from one organisation to another, resulting in no new talent coming into the sector.

“At IESA, we're trying to see what we can do collectively, so that as an industry, India has a better chance of succeeding rather than one company becoming superior to others,” Walawalkar noted. He believes that the market will never have one dominant player. “The sector is growing so exponentially that there are enough opportunities for new players to get in; however, it will get concentrated to 10-15 players who can scale up to 100-gigawatt hours,” Walawalkar added.

The target is to have at least two to three players to start their journeys in the next two years so that by 2030 they can go beyond the 50 gigawatt-hour mark, he concluded.

Also Watch

Mobility Conversations | Interview with Vikram Handa, MD, Epsilon Materials

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