India targets major global companies for manufacturing batteries locally
Reuters reports that India will pitch companies such as Tesla Inc., Samsung and LG Energy to convince them to invest in manufacturing batteries locally, as it seeks to establish a local supply chain for clean transportation.
According to a government official, India is planning to hold five roadshows next month in countries including the United States, Germany, France, South Korea, and Japan to convince battery makers to set up local production.
Samsung, LG Energy, and Tesla are among the companies that have been invited to attend, although delegate lists have not been finalized. Among the other companies on the docket are Panasonic, Northvolt, and Toshiba.
The government is seeking investment proposals from companies as part of an overall $2.4 billion incentive program to boost the process of manufacturing batteries.
Several domestic players, including Reliance Industries , Adani Group and Tata Group, have expressed interest, but there hasn’t been much passion from global ones, the official said.
Global companies are wary about entering without local partners, as it requires significant investment and India ranks poorly when it comes to contract enforcement, he said. Others choose to invest in bigger markets like the United States and Europe where there is a greater demand for batteries.
Bringing in global companies will signal India’s seriousness, the person said. Furthermore, they will bring good technology, high quality standards, and safety.
The announcement comes as nations prepare to meet in Glasgow for the 26th United Nations Climate Change Conference (COP26). The government sees clean auto technology as a crucial part of its plan to reduce pollution in major cities, reduce oil dependence, and meet its carbon emission targets.
India intends electric cars to make up to 30% of total private car sales by 2030 and for electric motorcycles and scooters to make up 40% of total sales.
This is expected to drive demand for batteries that make up about 35% to 40% of the total vehicle cost and can be reduced through local production. India currently sells a small number of electric vehicles (EVs) mainly due to their high price as the batteries are imported.
Nonetheless, growth is picking up as the government provides incentives to automakers and electric vehicle buyers.
In its $2.4 billion program, India aims to establish 50 gigawatt-hours (Gwh) of battery storage capacity over five years, which it expects will attract about $6 billion in direct investment.
In order to qualify for the incentives, companies must install a minimum of 5 Gwh of storage capacity and meet certain local content criteria. It will take a minimum investment of more than $850 million, the official said.
Source – Reuters