You can be on Entrepreneur’s cover!

Is Lithium Reserves Discovery a Game-changer For India's EV Goals? According to news reports, Lithium reserves were found two days ago in Degana in Rajasthan's Nagaur district. It was, however, reportedly denied yesterday by the GSI

By S Shanthi

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Unsplash

First, it was Karnataka, then Jammu & Kashmir and now Rajasthan. We are talking about the discoveries of Lithium reserves across the country in the last few years. Every time a discovery happens, it sparks debates on whether or if it will play a key role in fulfilling India's green goals.

The recent discovery that has brought back the discussion, though denied yesterday by the Geological Survey of India (GSI), is that of Lithium reserves found on Revant Hill in Degana in Rajasthan's Nagaur district by GSI. According to some experts, this could meet 80% of the country's demand.

Well, before we get into the nitty-gritty of what this kind of discovery means for India, here are some pointers on the connection between Lithium and electric vehicles (EVs).

  • A single EV has around 10 kilograms of lithium in it
  • Over 40% of the cost of an EV in India is for the lithium-ion battery
  • We need about 60 giga-watt-hour of lithium-ion battery for a minimum of 40% transition to EVs
  • Lithium battery also has large applications in telecom, rooftop solar, DG offset, among others
  • India has so far been hugely dependent on China and the US for Lithium
  • India imported 450 million units of lithium batteries valued at INR 6,600 crore in 2019-'20

Lithium reserves have so far had skewed concentration across the world. According to a report titled India's Electric Vehicle Transition by The Council and Shakti Sustainable Energy Foundation, about 58% of the world's lithium reserves are in Chile and about 43% of rare earth mineral reserves are in China. Due to this, India imports huge quantities of lithium batteries.

But, will the recent discoveries be a game-changer for India's electric vehicle plans? How much will it help advance the EV transition in India? Will it help us shun dependency on China and the US?

What these discoveries mean for India's green goals

As the demand and market for EVs increased, the dependency on Lithium has also increased over the years. According to an analysis by The Energy and Resources Institute (TERI), India's lithium imports increased by about 6.5 times between 2010 to 2017. India imported 450 million units of lithium batteries valued at INR 6,600 crore ($929.26 million) in 2019-'20, said Harsh Vardhan, Union Minister of Science and Technology and Earth Sciences, during his Lok Sabha speech on February 7, 2020.

This is why these discoveries are being considered a huge step forward in India's journey towards 100% EV penetration. "Lithium-ion batteries are by far the most efficient, safer, and lightweight battery options for EVs. This is where the discovery of Lithium reserves in different parts of India augurs very well for the Indian EV ecosystem," said Ankit Kedia, founder and Lead Investor, Capital A.

He believes that a start has to be made somewhere, and this potential of domestically produced Lithium usage in supporting the battery manufacturing industry and the overall EV ecosystem is huge. "This would bring much-needed encouragement in the domestic markets that have currently been affected by the withdrawal of the Faster Adoption and Manufacturing of Electric Vehicles in India (FAME II) scheme. It must be noted that EV adoption in India has taken off in a big way and people are going to continue buying the EVs regularly when the holistic and supportive ecosystem is in place. That's where I believe India has made great progress, and the recent discoveries of Lithium reserves will be highly instrumental," he added.

India is reportedly planning to discontinue the second phase of the INR 10,000 crore FAME II scheme after the next financial year and instead offer incentives to EV makers through ongoing production-linked incentive (PLI) programs.

"This discovery could lead to a reduction in battery prices in the future, driving the growth of the EV market in India and helping to mitigate the effects of climate change. The discovery is a crucial step towards accelerating India's transition to a greener future," said Tushar Choudhary, founder and CEO, Motovolt Mobility.

To reach a cell production capacity of 1GWh, we need 850 tonnes of li-carbonate, depending on the cell chemistry. The global cell production capacity is 500GWh, and India's target for 2030 is to reach 70GWh of cell capacity.

"Now, considering all the 5.9 metric tonnes of lithium reserves found in J&K could be extractable, it can support a cell production capacity of 6TWh, giving India an extrapolated push to reach its 2070 net-zero goals. The discovery does not just make India self-sufficient in catering to its battery demands, but will also help India reduce its dependency on neighboring countries, and thus protect its FOREX capacity and reduce the trade deficit as the capital invested in lithium imports will be locked in the country," said Pankaj Sharma, co-founder and director at Log9 Materials said in an interview after reserves were found in J&K.

Will this suffice?

While the EV industry and other industries that use Lithium have found these discoveries as a positive step toward building a greener and self-reliant India, they also feel that the mere discovery of Lithium reserves isn't automatically going to change everything. "We will need to build processing infrastructure and expertise. This is an area where countries like China and the US are far ahead of us in terms of sophistication and maturing of markets," said Kedia.

The total world reserves of lithium are around 88 Mn tonnes with Bolivia having the highest lithium reserves of 21 Mn tonnes, followed by Argentina (20 Mn tonnes), the United States (12 Mn tonnes), Chile (11 Mn tonnes), Australia (7.9 Mn tonnes), China (6.8 Mn tonnes) and India (5.9 Mn tonnes).

"It will reduce dependence on lithium imports, substantially cut down battery manufacturing costs, and help lower the prices of EV vehicles in the future. However, we are still at an early stage of exploration and need to ascertain the commercial viability. Secondly, investments in Lithium batteries need to be prioritized. Once these tenets are in place, we are confident this discovery will make India a global destination for EV manufacturing," said Kalyan C Korimerla, MD and co-promoter, Etrio Automobiles.

After 1,600 tonnes of lithium reserves were found in Karnataka in January 2021. the department of atomic energy said that until a proper technology or method is available to profitably extract lithium from its ore, it is not commercially viable. Thus, Sharma feels that in parallel, we should explore possibilities of battery recycling and establish an end-to-end indigenous supply chain process to reduce our dependence on foreign countries.

Further, mining may also have some negative impacts on the environment. "Every % of demand met by recycling output substitutes mining which significantly benefits the environment. At the same time, recycling these raw materials can help reduce the cost of new batteries and create employment opportunities in li-ion battery recycling. In the long run, li-ion battery recycling can add a positive GDP impact to any economy and help meet the increased demand for Li-ion batteries," said Nitin Gupta, CEO and co-founder, Attero Recycling.

As mentioned above, Lithium-Ion batteries will be key to India's EV success. Thus, along with recycling, focusing on ways to extract Lithium and using them with 100 % safety in mind, can go a long way in replacing petrol or diesel with lithium-powered batteries as the source of power in vehicles.

S Shanthi

Former Senior Assistant Editor

Shanthi specializes in writing sector-specific trends, interviews and startup profiles. She has worked as a feature writer for over a decade in several print and digital media companies. 

 

Growing a Business

5 Entrepreneurial Mindsets That Drive Success

Here are the mindsets shared by the most successful entrepreneurs.

News and Trends

Aerospace Components Manufacturer JJG Aero Secures USD 12 Mn from CX Partners

The Bengaluru-based platform aims to utilise the raised funds mainly toward furthering vertical integration, boosting manufacturing capacity at the new location, and other business activities.

News and Trends

Nikhil Kamath's WTFund Invites Applications from April 15 from Young Entrepreneurs

The new sector-agnostic fund will offer a package including a non-dilutive grant of INR 20 lakh and will enable founders to retain full equity in their ventures.

Business News

Nike Responds to Criticism Over U.S. Women's Olympic Uniforms: 'Everything's Showing'

The company is the official outfitter for the U.S. Olympic track and field athletes.

Growing a Business

How to Leverage Business Awards to Foster Innovation, Build Your Brand and Retain Top Talent

Awards validate a company's efforts in innovation and corporate responsibility but also enhance its reputation, attract talent and open doors to new partnerships and customer segments.