Unlocking Supply Chains for Localizing Electric Vehicle Battery Production in India

India aims to indigenize battery manufacturing through the PLI-ACC scheme to install 50 GWh of capacity by 2026, yet remains heavily reliant on imports for cells, components, and machinery. The report identifies six primary challenges: skilled labour shortages, a lack of testing and validation centres, dependence on imported critical minerals, insufficient recycling infrastructure, the need for ESG standards to ensure export competitiveness, and high import dependence for manufacturing equipment. It recommends prioritizing the localization of synthetic anodes, electrolytes, and LFP cathodes, while expanding R&D for next-generation technologies like sodium-ion batteries.

• India's goal to install 50 gigawatt hours (GWh) of domestic battery manufacturing capacity by 2026 is supported by the Production Linked Incentive Scheme for Advanced Chemistry Cell Battery Storage (PLI-ACC), which allocated INR 18,100 crore (USD 2.5 billion) in subsidies over 5 years.
• India is highly dependent on imports for battery cells and components, with lithium-ion cells accounting for 75%–80% of total battery costs. S&P Global Mobility predicts that only 13% of total battery cell demand will be sourced domestically by 2030.
• A critical shortage of skilled labour across R&D, cell manufacturing, and battery management systems has led to safety concerns, investment delays, and hindered innovation.
• India lacks a comprehensive ecosystem for testing and validating raw materials for EV battery cells; as of May 2024, Bharat Test House is the only accredited agency providing testing for battery cells under the PLI-ACC scheme.
• Heavy reliance on imported critical minerals like lithium, cobalt, graphite, and nickel exposes the industry to price volatility and supply disruptions, particularly given China's dominance and recent export restrictions on battery-grade graphite.
• The domestic battery recycling infrastructure is insufficient, necessitating a reliance on virgin materials. While the 2022 Battery Waste Management Rules mandate recovery rates and recycled content, a clear strategy for collection and segregation is still needed.
• India's export competitiveness is hindered by a lack of clear ESG reporting and certification standards, which are increasingly required by markets in the EU and United States, such as the EU's Sustainable Battery Regulation.
• There is a significant bottleneck in securing cell manufacturing equipment, with imports from China totalling USD 1.5 billion in 2022. Most global equipment suppliers are operating at over 95% capacity, risking production delays for new entrants.
• India has a strategic opportunity to prioritize lithium ferro phosphate (LFP) batteries over nickel manganese cobalt (NMC) because LFP is cheaper, more stable in extreme temperatures, and reduces reliance on cobalt and nickel.
• The report identifies synthetic anodes, electrolytes, and cell casings/pouches as having high localization potential due to existing domestic capabilities and low intellectual property reliance.

APA

Goel, S., Moerenhout, T., & Bollini, R. (2024). Unlocking Supply Chains for Localizing Electric Vehicle Battery Production in India. International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-11/electric-vehicle-battery-production-india.pdf

Chicago

Goel, Siddharth, Tom Moerenhout, and Rahul Bollini. Unlocking Supply Chains for Localizing Electric Vehicle Battery Production in India. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-11/electric-vehicle-battery-production-india.pdf.

Wikipedia

{{cite report |last1=Goel |first1=Siddharth |last2=Moerenhout |first2=Tom |last3=Bollini |first3=Rahul |title=Unlocking Supply Chains for Localizing Electric Vehicle Battery Production in India |publisher=International Institute for Sustainable Development |date=November 2024 |url=https://www.iisd.org/system/files/2024-11/electric-vehicle-battery-production-india.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{goel2024unlocking, author = {Goel, Siddharth and Moerenhout, Tom and Bollini, Rahul}, title = {{Unlocking Supply Chains for Localizing Electric Vehicle Battery Production in India}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = nov, url = {https://www.iisd.org/system/files/2024-11/electric-vehicle-battery-production-india.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }