Battery storage technology is becoming the main driver for the decarbonization of the transport and energy sectors. While batteries are rapidly accelerating the transition to electric mobility, they can also solve the intermittency issues of renewable energy sources such as solar and wind. Deploying energy storage, as a backup to the grid, can help manage variability in power generation and load.
Currently, the preferred energy storage options are lithium-ion battery (LIB) variants which are widely used in consumer electronics and electric vehicles (EVs). LIB feedstocks are geographically concentrated – for example, lithium is mostly found in Australia and graphite is mined largely in China. The distribution of the global EV battery supply chain (see chart) indicates that while the upstream EV supply chain is diverse, this is not the case as you move midstream and downstream.
India does not currently have a strong domestic manufacturing industry and depends on imported lithium batteries or LIB packs. In recent years, the global price of cobalt and nickel has increased by 85% and 55% respectively, while battery-grade lithium has seen a price increase of more than 700% since the start of 2021. This cost spike battery raw materials is emerging as a major challenge in reducing the cost of batteries where batteries represent up to 30-40% of the total vehicle cost.
Policies and incentives for a self-reliant India
The adoption of electric vehicles is expected to increase significantly in many states and UTs in India. This will proportionally lead to an increased demand for batteries for electric vehicles. To address the challenges of material supply vulnerability and criticality, the Government of India (GOI) has recently announced Product Linked Incentive (PLI) schemes, which aim to boost domestic battery manufacturing capabilities , via a planned expenditure of Rs 18,100 crore (over 5-years) for Advanced Chemistry Cell (ACC) technology. The proposed Battery Swap Policy is another step in the right direction that reduces the upfront costs of electric vehicles. It offers a few enabling actions, including a unique identification number (UIN) and the ability to store and share an EV battery’s technical and performance data throughout its life cycle.
End-of-life (EOL) recycling of used EV batteries is a priority area that can significantly minimize the environmental implications of landfilling and also help recover raw materials to boost domestic production. When an electric vehicle (EV) battery loses 20% of its original capacity, it is considered unsuitable for use in an electric vehicle. However, it can still be reused in stationary storage applications. Taking this aspect into account, the Government of India has recently notified the Battery Waste Management Rule (BWMR) 2022 to ensure a more sustainable ecosystem (circular economy) through the reuse and recycling of used EV batteries and the provision of responsibility. extended list of producers (EPR) which maps the main responsibilities.
Challenges in the Indian context
Over 90% of India’s EV sector is dominated by light-duty EVs, such as electric two-wheelers, which require small LIB packs. Several parts of India experience a tropical climate and it is well known that extreme temperatures not only reduce battery life and performance but can also lead to serious safety issues. The thermal management of small LIB packs is relatively more difficult than that of large battery packs – battery packs for electric cars and electric buses use a liquid cooling mechanism which provides better thermal management.
In addition, it is difficult to estimate the remaining useful life (RUL) of EV batteries, especially for small battery packs, which determines the technical-economic feasibility of used EV batteries in reuse applications. More emphasis needs to be placed on implementing regulations and standards for electric vehicle batteries at different life stages. This will help address safety and performance issues of EV batteries in Indian operating conditions
Leading the way towards a sustainable EV battery ecosystem
Having robust frameworks in place to estimate the RUL and resale value of used EV batteries can aid in the development of sustainable business models. Equally important is identifying gaps in actual implementation, with a focus on data security, data sharing, and security standards – at every stage of battery life. Battery recycling is still in its infancy in India, with the informal sector often resorting to unsafe practices to extract usable metal. While the Indian recycling industry needs capacity building to manage e-waste LIBs (laptop batteries, mobile phone batteries, etc.), stakeholders also need to be trained to manage batteries of high power EVs.
India also needs to develop a robust R&D ecosystem to address the technical challenges of existing commercial EV batteries. This can be done by strengthening university-industry collaboration which could also explore alternative battery technology options. At the same time, industry players should consider developing innovative business models for better sharing of technical and financial risks among key stakeholders.
Globally, there is a lack of proven business models related to the reuse and recycling of used electric vehicle batteries. India needs to focus on developing a sustainable EV battery ecosystem. This includes a renewed focus on home battery manufacturing, embracing circular economy principles through end-of-life reuse and recycling, and exploring the diversification of battery technologies. This approach will not only benefit the transport and energy sectors, but it will also benefit the environment and help India meet its ambitious climate commitments at COP26.
[This article was authored exclusively for ETEnergyworld by Dr. Parveen Kumar, Senior Program Manager, Electric Mobility and Rama Thoopal, Communications Lead, Sustainable Cities and Transport Program at World Resources Institute India (WRI India).]
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