The Challenge Of Lithium-Ion Dependency In India's EV Adoption Only a few startups are working on innovation-led products that can be alternatives to lithium-ion batteries

Most countries across the globe, including India, are moving towards the era of electric vehicles (EVs). The US automobile giant General Motors has announced that it is aiming to stop selling petrol-powered and diesel models by 2035. Germany's Audi too plans to stop producing them by 2033.

Governments across the world have prepared roadmaps to fast-track EV adoption. India targets a 30% penetration of electric vehicles on Indian roads by 2030. The FAME 2 (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles Phase II) scheme has allocated a budget of INR 10K Cr to give a push to EVs to curb pollution and reduce crude oil imports.

As things get back to normalcy, startups and automotive players are once again upping their game to ensure the target is reached. However, the faster the adoption, the more the consumption of lithium-ion batteries, used in EVs. These batteries produce electricity by moving lithium ions from one layer called the anode to another called the cathode, both separated by another layer called the electrolyte. These are rechargeable batteries that are also used in many industries including consumer electronics. In fact, a single EV has around 10 kilograms of lithium in it and over 40 % of the cost of an EV in India is for the lithium-ion battery.

However, many reports suggest that lithium reserves have skewed concentration across the world. According to a report titled "India's Electric Vehicle Transition' by CEEW 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.

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.

To resolve this issue, few startups in India today are looking at finding alternatives to this technology.

The question today is can these alternatives or any other methods help India shun dependency on imports for lithium batteries and how soon.

Can We Build Successful Alternative Battery Technologies?

Very few startups have successfully shown technologies that are alternatives to lithium-ion. "There are only a handful of Indian startups such as Log 9 Materials and ION Energy and few bigger companies such as RIL, MTAR, TATA Chemicals, KPIT and government entities such as CSIR, IOC, etc. working on innovation-led products in this space. Most of these organizations are still in their early days conducting research and pilot projects," said Pratip Mazumdar, Partner, Inflexor Ventures.

Aluminum air and solid-state batteries have shown promise but we are yet to see them being produced and manufactured at scale. Some of the interesting and high potential alternatives to Li-ion batteries are technologies around Hydrogen Fuel Cell which have seen some adoption in the Japanese market, and Graphene led supercapacitors. However, hydrogen fuel cells are reportedly loaded with safety concerns and processing and supply chain challenges.

"None of the startups have been able to get their products into the market yet. The real replacement for lithium-ion technology can only come in when someone is able to beat lithium-ion batteries tech specifications and at the same time, mass manufacture it to get the economics comparable to lithium-ion tech," said Ashwin Shankar, founder, BatteryPool.

He also added that building new battery technology is hard, expensive and they require very skilled talent and thus there aren't any scalable alternatives yet to lithium-ion battery technology. "If we look at the investment ecosystem in India, there has been very little funding that has gone into new battery technology," he said.

However, Christie Fernandez, founder and CEO, Sooorya and a well-known expert in the EV space believes that alternatives to lithium batteries will slowly emerge in the market, including hybrid lithium batteries, and metal-air batteries. "Indian Oil Corporation Limited (IOCL) has a JV with Phinergy to set up manufacturing facilities for Aluminium-Air Batteries, which can be used to recharge EV batteries, extending the range of the vehicle. India also has a lot of solar energy production, which can be utilized to charge EVs and recharge swappable batteries," he said. This is expected to usher in a new era of prosperity amongst rural communities too.

Some also believe that attempting to force-fit a single solution across all domains is only going to add to the challenge of transitioning to EVs and one needs to build complementary or supplementary technologies to better cater to the market requirements. Log 9 is one such startup that has leveraged its material competency and is at the forefront of developing such technologies.

Log 9 Materials, a startup launched in 2015 and backed by Amara Raja Batteries, Exfinity Ventures and Sequoia Capital India's Surge Programme, is offering hybrid Li-ion battery packs (void of Cobalt) addressing the three key challenges in the commercial vehicle use-case, namely charging time, high power output and life of the battery. The solution is built for intra-city use cases and is ideal for Indian conditions, claims the startup. "Furthermore, the globally achieved manufacturing scale of these technologies is relatively small, meaning that India can compete and accomplish global leadership in the same, unlike conventional chemistries which require billions of dollars of investments on the first day to achieve competency," said Akshay Singhal, founder and CEO, Log 9 materials.

Log 9 is also building Aluminium Fuel Cells (AFC) targeted for the long-haul logistics segment, which is apparently an extremely safe solution with a simple and circular supply chain adding to the sustainability aspect of the solution.

The Positive Stance

Even though the alternatives may take a long time to scale, many are also optimistic that imports and mining for battery materials will reduce over a period of time as a big advantage of lithium batteries is that they can be recycled.

"Almost 95% of the battery materials can be recovered and reused to make batteries. Another important aspect most people are unaware of, is the fact that in a typical lithium battery, lithium comprises less than 10% of the battery, and other battery materials such as graphite, iron, manganese, nickel, aluminium can be sourced locally," said Fernandez.

He also believes that it's a myth that China controls most of the lithium mines in the world. "Lithium is not scarce, brine-based lithium sources are in various stages of development in Argentina, Bolivia, Chile, China, and the US, and mineral-based lithium sources are being developed in Africa, Australia, South America, Canada, and Europe," he added.

Additionally, India's first lithium refinery which will process lithium ore to produce battery-grade material will soon be set up in Gujarat. According to news reports, Manikaran Power Limited will be investing over INR 1,000 crore to set up this refinery. Battery major Exide Industries is also reportedly looking to get into cell manufacturing for lithium-ion batteries.

"India can begin by focusing on niche technologies wherein our country can lead the industry and achieve global competency. Realizing the same will require setting up an industrial ecosystem involving urban mining of battery-grade raw materials, processing of electrode materials like graphite, the supply chain for ancillary components like fuse, relays, connectors, steel casing, among others," said Log 9 materials' Singhal.

Learnings From Other Countries

The US, Israel, Korea and Japan have seen a lot of work happening on alternatives to lithium-Ion. "The key thing for us to learn is how to aid innovation in an efficient manner and create an enabling ecosystem," said Inflexor Ventures' Mazumdar.

"What we can learn from other countries is the fact that both public and private enterprises need to make significant investments into R&D for new battery technologies to have aspirations of being self-sufficient and drive a cleaner future for mobility in India," added BatteryPool's Shankar.

Some experts believe that if do not drive local innovation in advanced technology development we would never be able to compete globally with borrowed technologies. "While the entire world is working towards further enhancements of battery technologies with Solid State Batteries, Supercapacitors, Liquid Metal Batteries, we are beginning to get overwhelmed with initiating our foray into manufacturing of conventional Li-Ion batteries. Many conventional Li-ion chemistries are unsuited for the Indian conditions, and there's a need to build scalable niche technologies, the likes of supercapacitors, fuel cells, among others," said Log9 Materials' Singhal.

However, there are only a small group of people working on innovation and product development in alternatives. Thus, experts believe there is a need for more government grants to enhance R&D. Additionally, building long-term strategic partnerships with countries rich in lithium like those in Africa and Australia, can also help in meeting the demand.