Suzuki, Toshiba to make Gujarat Li-ion unit an export hub
3 min read . Updated: 05 Feb 2021, 07:00 AM IST
PremiumThe factory, the first such in India for manufacturing Li-ion cells, is set to open around April with assembling of battery packs, before graduating to producing Li-ion cells around 2024-25, said one of the three people cited above
Suzuki Motor Corp., Toshiba Corp. and Denso Corp. plan to turn their joint manufacturing facility for lithium-ion (Li-ion) cells in Gujarat into a global export hub, said three people aware of the development.
The factory, the first such in India for manufacturing Li-ion cells, is set to open around April with assembling of battery packs, before graduating to producing Li-ion cells around 2024-25, said one of the three people cited above.
The plans of the three Japanese manufacturers underscore the Indian government’s Atmanirbhar Bharat push to woo global manufacturers that are exploring a China-plus-one strategy for production.
The joint venture, TDS Lithium-ion Battery Pvt. Ltd, is also expected to receive sops under the government’s production linked incentive (PLI) scheme for advanced chemistry cell (ACC) manufacturing in India.
Lithium cells are considered the heart of an electric vehicle (EV) and other gadgets such as mobile phones and laptops. Most EV makers currently buy batteries and cells from China, the world’s largest producer of Li-ion cells.
With China dominating the global market for Li-ion cells, India, through programmes such as the PLI scheme, wants to avoid a repeat of events with solar equipment manufacturing where China leveraged its first-mover advantage to capture the market.
“The battery pack manufacturing joint venture by the three companies will realize a stable supply of Li-ion battery packs in India in the course of promoting sustainable cars in the country and will contribute to the ‘Make in India’ initiative by the Indian government," a spokesperson for Toshiba India said in an emailed response.
“In India, greater attention is being paid to the environment and electrification of automobiles. In the Indian automotive market, where compact cars are the mainstream models, the introduction of sustainable technology suitable for such affordable cars is required," the spokesperson said.
Queries emailed to the spokespersons of Suzuki’s local unit, Maruti Suzuki India Ltd and Denso Corp. on Tuesday remained unanswered.
In 2017, Suzuki formed a joint venture with Toshiba and Denso to invest ₹1,250 crore to build a factory in Hansalpur, Gujarat, to assemble Li-ion battery packs.
Subsequently, the three companies signed a memorandum of understanding (MoU) with the Gujarat government to invest a total of ₹4,930 crore to manufacture 30 million lithium cells a year.
M.K. Das, Gujarat’s additional chief secretary (industries and mines), said, “Suzuki, Toshiba and Denso have big expansion plan in the coming year in a phased manner. They not only want to cater to the domestic market but, given that Gujarat also has port facilities, they also will be able to have market access in other countries as well."
Meanwhile, in a boost to efforts to manufacture Li-ion cells locally, the Indian government on Wednesday confirmed the presence of 1,600 tonnes of lithium reserves in the Mandya district of Karnataka.
The second person cited above said the joint venture will export Li-ion cells from India to developed and emerging economies.
“Toyota has huge plans for its hybrid electric vehicles across the globe in the coming years, and this factory will become one of the sources for its Li-ion batteries and cells globally. The JV will also export cells to other companies as well," the person said. “In the coming decade, this is likely to become one of the top foreign investments in India in the lithium manufacturing space," the person said, requesting anonymity.
The Indian government announced on 11 November the PLI scheme worth ₹3 trillion to encourage companies in 10 sectors to boost local manufacturing and improve exports subsequently.
To promote local manufacturing and curb imports from China, the government earmarked ₹18,000 crore to subsidize advanced chemistry cell (ACC) manufacturers such as Li-ion cell makers through the scheme.
“ACC battery manufacturing represents one of the largest economic opportunities of the 21st century for several global growth sectors, such as consumer electronics, electric vehicles, and renewable energy. The PLI scheme for ACC battery will incentivize large domestic and international players in establishing a competitive ACC battery set-up in the country," the government said in a statement at the time.
