India's move towards 100 per cent electric vehicles (EVs) fleet by 2030 could create a $ 300 billion domestic market for EV batteries, according to a report by government think tank Niti Aayog and Rocky Mountain Institute.
The country will account for two-fifths of global EV battery demand by then and the shift to the clean energy fuel could require an investment of $ 100 billion to set up 20 Giga factories to produce batteries, based on today's cost.
Titled 'India's Energy Storage Mission: A Make in India opportunity for globally competitive battery manufacturing', the report further said the country's ambitious target for EVs is a "game changer and its achievement could drive down costs and build production-scale faster than anticipated in existing projections".
"India's leapfrog vision of a shared, electric, and connected mobility system could create a $300 billion domestic markets for electric vehicle (EV) batteries by 2030," it said.
This would represent nearly two-fifths of global EV battery demand, according to the report.
Commenting on the findings, NITI Aayog CEO Amitabh Kant said,"India's mobility transformation presents an enormous economic opportunity for India."
Innovative business models and supportive policy frameworks can help make India a global hub for manufacturing electric vehicles and their components, accelerating this transition while creating jobs, strengthening Indian industry, and cleaning the air, he added.
To meet India's domestic EV battery requirements, the country would need around 20 Giga factories, each of which entails an investment of $ 5 billion, thus taking the total to $100 billion.
As per the report, a giga factory is a factory that is representative of Tesla's battery manufacturing facility in Nevada, USA which has a total manufacturing capacity of 35Gwh per annum and required an investment of $ 5 billion.
It estimates that India can capture 2540 per cent of the total economic opportunity represented by EV battery manufacturing under a scenario where India imports lithium-ion cells and assembles these cells into battery packs.
Going forward, as the country's EV battery manufacturing matures and starts producing both cells and packs while importing only the cathode or its raw materials, the report said India stands to capture nearly 80 per cent ($ 240 billion) of the economic opportunity over time.
It further said based on historic learning rates, demand for EV batteries in India could drive down global battery prices by as much as 16 per cent to USD 60 per KWh by 2030 as compared to projections that do not include India's EV goals.
Rocky Mountain Institute Managing Director (India) James Newcomb said while the global energy transition is already underway and moving with breathtaking speed, many forecasts have not taken into account India's ambitions in mobility.
"India has an opportunity not only to become one of the largest electric vehicle markets in the world but also to support electric vehicle adoption globally," he added.
The report, however, said coordination among industry stakeholders and government can help define a pathway to growth and competitiveness by establishing a shared technology roadmap, creating common standards, and aligning policies.
NITI Aayog and RMI recommended that India create a consortium, including representatives from the battery industry, OEMs, government, and subject experts to work towards achieving the goal.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)