The son-in-law of India’s biggest steel tycoon is betting on converting coal tar into graphite anodes for electric car batteries, in an attempt to test China’s monopoly in the sector.
Vikram Handa set up Epsilon Advanced Materials Pvt – India’s first manufacturer of lithium-ion battery parts – in the southern state of Karnataka in August, which supplied raw materials from the largest steel plant in the country owned by his father-in-law Sayyan Yindal. Handa plans to invest 60 billion rupees ($ 807 million) to produce 100,000 tons of synthetic graphite anodes by 2030, or about 10% of estimated global demand.
The anode materials are the negative electrode in lithium-ion batteries and make up a quarter of the cell’s components. China produces more than 80% of the world’s supply of these anodes, importing raw materials from countries including India. By producing anodes in India, Handa wants to move the South Asian country from a mineral center to a battery center to a battery materials center.
India has a lot of room for local production of batteries for electric vehicles because it has access to raw materials, an incentive plan for production of 20 billion dollars, a proposed policy for battery materials and improving the prospects for demand, said Handa (40).
“I am quite optimistic about the look of Indian battery space over the next decade,” he said. “It will take another two to three years for really serious money to enter this area, but after that you will see a lot of money pouring into it. India is such a large car market that it cannot be ignored. “
Several Indian car manufacturers have started production or announced plans to produce EVs. It’s the latest Bhavish Aggarwal’s Ola Electric Mobility Pvt. Aggarwal said he expects the startup to earn 15% of the world’s e-scooters by summer 2022. Tesla Inc., which chose Karnataka, the same state where Epsilon has its factory, for its first plant, according to the chief state minister.
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One of the main motivators for this turn towards new energy vehicles: the cleaning of India’s stifling toxic air. The adoption of EVs has been slow, crippled by a lack of infrastructure and charging technology, higher car costs and a delayed flow of funds for the development and production of batteries and other technologies. India currently has some battery assembly plants, but no cell manufacturers. According to BloombergNEF, electric vehicles account for about 5% of annual Chinese car sales, compared to less than 1% in India.
“You are so dependent on cells from China that your cost structure will never actually collapse,” Handa said. India has the expertise needed to make cells and has abundant raw materials like aluminum, copper, electrolytes and nickel, key elements for batteries, he said, adding that “although everyone is constantly talking about lithium, it is a very small part of the whole raw material that goes into cell. “
Epsilon’s parent company processes coal tar, mostly from JSW Steel Ltd., in thick black pellets or liquid for use in everything from car tires to fuel and paints. Switching to battery materials would require the company to further process coal tar. In addition, Epsilon has secured a patent for the design of the furnace and expects to file three more patents this year. It currently exports anode precursor material to China, Japan and Europe.
Handina’s ambitions also drive Prime Minister Narendra Modi’s goal to lure Chinese producers. Indian Transport Minister Nitin Gadkari promised in March that he would soon announce a comprehensive battery policy. Epsilon has spoken to about eight companies planning to bid as part of a government anode delivery project, Handa said.
That domestic supply will become critical with an electric vehicle sales forecast that will overtake gas intakes in India by the end of the decade as prices align and infrastructure and technology improve, according to Mahindra & Mahindra Ltd., one of the largest car manufacturers in the country.
“If the adoption of EV starts in India and tomorrow Tesla comes and establishes a factory, then a large part of the anodes will be used on the domestic market,” Handa said. “We are confident that the Indian market will develop and that we will have the advantage of a first mover.”