A new and emerging trend is one of Electric Vehicles, it is not only something that is more environmentally conscious but will soon be put into legislation over the next 20 years as well. States like California have already put out legislations banning the sale gas vehicles from the year 2035. With companies like Tesla coming up, India has a golden opportunity to become a manufacturing hub for the electric vehicle segment. One of the main components in the production of electric vehicles is the electric batteries.
The most common form of battery used in the electric segment market present right now is the Lithium-Ion batteries. Now, there exists a paradox in driving electric vehicles, the sourcing of these batteries is not environmentally friendly. More than half of the lithium in the world comes from the so called “Lithium Triangle” that’s called Argentina, Bolivia, and Chile. This causes a constraint in its sourcing and high competition to export this rare earth metal which will lead to higher prices. India satisfies its demand of Lithium cells from China, and which is a riskier sourcing due to both geopolitical reasons and market competition. These East Asian countries prefer to sell their supply to western regions where they can get a higher price and a higher volume. The government of India has set up several schemes and several production linked incentives to set up sourcing in India and research on alternatives so that there is self-sufficiency, and the home market grows.
One such alternative that came up was of sodium Ion batteries. Now, there are better than Lithium Ion (Li) batteries and might dethrone them soon due to multiple factors. They can not only work on a wider temperature range, but they are found in abundance in the world, which makes their sourcing much easier and cheaper than that of Li. Moreover, their sourcing is more environmentally friendly and hence is a better conscious choice for the whole electric vehicle segment.
Talking about it from a Supply Chain aspect, the sourcing is one of the most complicated processes for electric batteries, but sodium Ion batteries have a relatively easier sourcing technique, cost and is sustainable. Moreover, the main components of Lithium-Ion batteries are Graphite, Aluminum and mainly Cobalt. The Democratic Republic of Congo is one of the biggest suppliers of Cobalt, and from India’s perspective they are a much more reliable trade partner than China due to various political and geopolitical factors.
Next, talking about the manufacturing capabilities, India will have to invest in production facilities, but the advantage with sodium will be that once its R&D is completed and the low energy density problem is taken care of, repeat costs for scaling are not that high.
In fact, United Kingdom being a technological leader in these technologies is a good future global strategy for India, especially considering India’s recent energy investments; for example, one of India’s top traditional energy companies i.e., Reliance recently invested 135 million dollars in the UK firm Faradion, further solidifying where we believe India’s future is and how we are taking steps to move in that direction.
Lastly, we know it is ecologically a more efficient choice, however its low cost and its safer hence even its distribution gets much easier. Its transportation costs are a fraction of Li, India has already started developing routes and connecting with big players, which makes it another investment in the right direction.
To conclude, India has taken steps in both private and public capabilities to move towards the future. This supply chain will become efficient only after a lot of trial and errors, when we learn how to manage the production capabilities, when we can predict the demand and adequately source in the right quantities. This is only possible after we crack the sourcing and make the necessary technological breakthroughs in this environment. I hoped to establish a link in how certain steps have been taken to bring India’s supply chain into the future.