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Business News/ Industry / Manufacturing/  Lithium supply may be key to government’s electric vehicles push

Lithium supply may be key to government’s electric vehicles push

Acquiring lithium fields in Bolivia, Australia, Chile could become as important as buying oil fields as India needs raw material to make batteries for electric vehicles

The government has set a target of 6 million electric vehicles by 2020 under the National Electric Mobility Mission Plan. Photo: HTPremium
The government has set a target of 6 million electric vehicles by 2020 under the National Electric Mobility Mission Plan. Photo: HT

New Delhi: India’s push for electric vehicles (EV) may lead to a substantial change in its energy security priorities, with securing lithium supplies, a key raw material for making batteries, becoming as important as buying oil and gas fields overseas.

The government is exploring measures ranging from leasing of electric vehicles to transferring technology to firms for commercial production of lithium-ion batteries developed by the Vikram Sarabhai Space Centre for use in automobiles, Mint reported. However, India does not have enough lithium reserves for manufacturing lithium-ion batteries.

Indian Institute of Technology-Madras professor Ashok Jhunjhunwala is in favour of acquiring lithium fields in countries such as Bolivia, Australia and Chile, given its need in manufacturing lithium-ion batteries.

“Government as well as the private sector companies should acquire them (lithium fields)," Jhunjhunwala said.

Also read: End of the road for fossil fuel vehicles by 2030, says Stanford study

The Economic Times on 25 April reported that Jhunjhunwala will spearhead the government’s electric vehicle programme.

This comes against the backdrop of ambitious government plans for a mass scale shift to electric vehicles by 2030 so that all vehicles on Indian roads by then—both personal and commercial—are powered by electricity. As part of this programme, the government is also exploring a strategy to task a company with buying EVs in bulk and then leasing them to companies such as taxi aggregators, in an attempt to bring down the cost of such vehicles. The centre has set a target of 6 million electric vehicle sales by 2020 under the National Electric Mobility Mission Plan.

Jhunjhunwala’s pitch has found traction with state-run Solar Energy Corp. of India (SECI) which plans to explore an EV play.

“It (acquiring lithium fields) is a good idea...Lithium will have to be brought," said Ashvini Kumar, managing director of SECI.

The Financial Express reported on 28 February that India plans to reach out to Bolivia, Argentina and Chile to procure lithium.

State-owned firms such as Bharat Heavy Electricals Ltd (Bhel), Power Grid Corp. of India Ltd and NTPC Ltd are looking at new businesses in this space. While Bhel wants to make EVs, PGCIL is considering setting up charging stations. Meanwhile, Vedanta Resources Plc. is looking at developing storage solutions.

Analysts say India’s plans to make EVs more cost effective and popular will be difficult to implement. The Indian electric vehicles market poses formidable challenges for policymakers, according to consulting firm Bridge to India.

Queries emailed to the spokespersons for the ministries of mines, new and renewable energy, road transport and highways, heavy industries and finance remained unanswered.

In its Three Year Action Agenda document released last month, NITI Aayog has made a case for putting more EVs on the road.

“It (government) must also study the costs and benefits of adoption of electric vehicles in the coming years. Though the cost of electric battery has declined recently, it still remains high. At the same time, its operating cost per kilometre driven is lower and it contributes to cutting city pollution," the agenda states.

Minister for road transport and highways Nitin Gadkari is also backing India’s EV programme.

Speaking at India Integrated Transport and Logistic Summit 2017 last week, Gadkari extolled the benefits of EV and said the programme will help in reducing India’s import dependence on hydrocarbons.

Shifting to electric vehicles will check pollution and reduce fuel imports. India paid Rs4.16 trillion to buy 202.85 million tonnes of crude oil in 2015-16. With around 81% of India’s oil needs and about 37% of gas needs being met through imports, state-owned firms have acquired hydrocarbon assets in 25 countries.

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Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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Updated: 16 May 2017, 04:33 AM IST
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