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| Domestic battery makers gear up to enter the lithium space |
| Danny Goodman / New Delhi Jun 14, 2009, 00:23 IST |
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Even auto companies, including Tata Motors, are foraying into the segment.
 Automobile battery manufacturers such as Amara Raja, Exide Batteries, Eveready Industries and Indocel Technologies are firming up plans to set up lithium battery manufacturing plants in the country.
Lithium batteries are the latest in electric vehicle technology. These environment-friendly batteries take less time to charge and offer longer driving range than conventional lead-acid batteries. Domestic battery majors which do not have lithium technology patents are planning to set up manufacturing plants either by picking up stakes in or entering into joint ventures with foreign players.
In addition, even automobile manufacturers such as Tata Motors are foraying into lithium battery manufacturing. In 2008, the company, which manufactures the Indica Vista car, had bought a 50.3 per cent stake in Norway’s Miljo Grenland for Rs 9.40 crore.
Miljo, which specialises in developing new technologies for electric vehicles, will manufacture state-of-the-art super polymer lithium batteries for Tata Motors. In fact, Tata Motors has plans to launch its electric Indica in Norway this year.
Eveready Industries, which manufactures torches and batteries, is also gearing up to enter the lithium battery space. This year, the company bought an 80 per cent stake in France’s Uniross SA for Rs 60 crore. Uniross manufactures rechargeable batteries.
“Uniross has a host of rechargeable battery technologies revolving around cadmium, nickel and lithium. Currently, Uniross’ lithium battery technology is used to power electric bicycles in Europe. Yes, there ‘s a demand for lithium batteries in the auto industry. We can comment on our plans for the auto industry later,” Eveready Industries’ CMD Deepak Khaitan told Business Standard.
Amara Raja Batteries (ARB), which manufactures batteries for the automobile and industrial segments, has an equity and technology partnership with US-based Johnson Controls. The US firm owns 26 per cent of ARB. “We can access Johnson’s advanced lithium technology for the automobile industry in the future. Currently, our plans are at the exploratory stage,” said Vijayanand S, head of engineering, ARB.
Sources said even Exide Industries – the largest automobile battery manufacturer in the country — is gearing up to enter the lithium battery space. However, when contacted, a spokesperson for the company declined to comment.
Multiple patents appear to be a major hurdle to clear before domestic companies could start manufacturing lithium batteries. “Every component of the lithium battery carries a patent. Which means, raw materials (speciality chemicals) inside a lithium battery cannot be easily replicated. Perhaps one solution is to find substitutes, but that’s difficult,” said Dr Hari Prasad Bellie, managing director of Indo cel Technologies, which supplies batteries to the Reva electric car.
An imported lithium battery used in the latest Reva car costs around Rs 3 lakh. “Even if one were to import the parts (used in the lithium battery) and assemble it here... one can save around 10 per cent of the total cost.
Thus, the actual cost savings can be calculated only when royalty issues on the battery are known,” Bellie said, adding that the 30 per cent import duty on lithium batteries can also be saved.
Dr Mathew Abraham, general manager (alternative fuel & advanced technologies) of Mahindra & Mahindra, said: “The other problem is scale. Both in domestic and overseas markets, the population of electric and hybrid vehicles is small compared to vehicles that run on traditional fuels. But that’s changing with more governments promoting usage of green vehicles.”
“It all depends on government policies. Should the government accede to our requirements for tax breaks and concessions on electric vehicles, we expect the population of electric vehicles to grow,” said Sohinder Gill, CEO, Hero Electric.
Electric two-wheelers currently constitute less than 1 per cent of the total two-wheeler segment in the country. Gill estimates this share to grow to 9 per cent in the next five years. Currently, about 1,000 electric cars ply on Indian roads.
With car companies such as Maruti Suzuki and Tata Motors gearing up to showcase their electric vehicles at the Commonwealth Games in 2010, awareness about electric vehicles would increase. This, in turn, would boost direct purchases of electric four-wheelers, said auto analysts.
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