Growing Prices Will Have No Effect On EV Adoption

In this conversation with SaurEnergy, Anand Kabra, Vice-Chairman and MD of Kabra ExtrusionTechnik Limited, whose EV vehicles and storage division, Battrixx, has grown at a staggering rate in FY ’22, talks about the firm’s plans and market in India.

Battrixx, founded in 2018, is a division of Kabra Extrusion Technik Ltd, which belongs to the Rs.1,000-crore Kolsite Group with Shreevallabh Kabra as its CMD. Having been in business since the early-1960s, Kolsite Group is today a force to reckon with.

Kabra Extrusion Technik Ltd, comprises two listed companies—Kabra ExtrusionTechnik and Plastiblends India Ltd. The Kolsite Group, which has been in business for over 60 years, is 2000 people strong and has eight manufacturing locations. With a listed parent company that is debt-free, Battrixx benefits from access to capital for growth. The green energy systems provided recently announced a Rs. 301-crore capital raise to fund its growth.

Armed with over two and a half decades’ experience in the global plastics industry, Anand Kabra, as its Vice-Chairman and MD, traces the success story of Battrixx and shares industry insights in this conversation.

How did the idea for diversifying into Battrixx come about?

Anand Kabra: Kolsite Group has been in business for more than 60 years with a strong workforce of 2,000 people and eight manufacturing locations. The management was keen on building a reliable brand in the B2B space that focuses on the future of clean energy and constantly innovates to meet the goals of changing lifestyles as well as facilitates an environment-first lifestyle. A brand dedicated to developing and producing green energy systems and solutions will power the growth of sustainable innovation in India and amplify the vision of the Group.

How has the journey been so far in terms of expectations at launch in 2018 versus the growth today?

Anand Kabra: The journey is still in motion with the belief that technology and the environment can co-exist and create a beautiful world. Having said that, I must say expectations and estimations during the journey are bound to change basis the market sentiment.

With Battrixx, we are continuously looking to invest in technologies that are aimed at bringing a change in the world. From where we started to where we are today, we have seen tremendous growth in these four years and our future plans entail building on the foundation we have laid.

Our revenue in FY’21 stood at Rs 1.96 Crores and Rs 109.15 Crores for FY’22. The upward growth trajectory has convinced us to invest and build Battrixx for the future and be continuously involved in the green energy segment.

With the spotlight on battery safety, how do you feel the industry should tackle the same?

Anand Kabra: High-performance lithium Ion Battery packs have substantial market potential. Catering to such a large demand requires major advancements in the areas of quality, safety, energy and power density, durability, and cost. Superior quality standards, a high degree of automation, first-class logistics, high-grade manufacturing technology, and maximum resource efficiency are all required to achieve these objectives.

For example, from a manufacturing set-up perspective, for lithium-ion pack manufacturers, there are a number of specific requirements, including stringent indoor climate control and cross-contamination. Quality, safety, performance, and service life of cells are all affected by these aspects. Production plants must be able to respond quickly and adapt to changing external requirements and internal control factors.

A battery system’s design should ensure that an energy storage system performs efficiently, reliably, and safely for an extended period of time during operation and deployment. Lithium-ion cells are the heart of lithium-ion battery systems, and they come with their own set of design constraints and stringent supplier evaluation and quality assessment is of paramount importance. Aside from electrochemical storage cells, the battery system is made up of a variety of mechanical, electrical, and electronic components that must all work in harmony.

Do you see significant shifts happening within the lithium battery segment- say, a faster shift to LFP batteries, perhaps? What is your take?

Anand Kabra: The six chemistries that are typically utilized currently are lithium iron phosphate (LFP), lithium manganese oxide (LMO), lithium cobalt oxide (LCO), lithium nickel cobalt aluminium (NCA), lithium nickel cobalt manganese (NCM), and lithium titanate oxide (LTO).

Aside from this present generation of lithium-ion technology, several of the chemistries under development and study today could become the next “standard” in the near future. The few chemistries in development are Solid-State Batteries, Lithium-Ion with high Nickel and Silicon content Batteries, Lithium-Sulphur Batteries, Lithium-Metal Batteries, Lithium-Air Batteries, Sodium Ion Batteries, Aluminium Ion Batteries, Magnesium Ion Batteries, and Zinc-Air Batteries.

LFP has a competitive advantage in the market because it uses low-cost materials like iron and is thermally stable, giving it a competitive edge being both low-cost and safe. It has excellent thermal stability since it does not react destructively with electrolytes until temperatures exceed 350°C. Because iron is the major reactive material, it is naturally harmless and environmentally acceptable, and hence the industry is accepting the change to LFP-based battery packs.

The good news is that LFP batteries are still readily available and, thanks to tried-and-true technologies to buy and manufacture. Increased investment in NCMs or other formulations will become prohibitively expensive due to high price rises across the board for materials that have outweighed the technological improvements gained thus far. Separators and anodes, among other sections of the battery, are becoming more expensive. Automobile manufacturers have already made or are about to make the move to LFPs.

Since 2018, we have seen regular price projections predicting a downward shift in lithium battery storage costs. However, in recent months, those projections seem to have become too ambitious. Do you agree?

Anand Kabra: In 2021, global average battery prices declined by 6% to $132 per kWh, a smaller decline than the 13% drop seen in 2020. According to the analysis, with such high prices, battery-pack rates are projected to increase by 15% from the weighted average price in 2021.

Cobalt and nickel prices more than doubled between March 2021 and May 2022, putting a strain on the supply chain as battery demand grew. The Russian invasion of Ukraine fuelled metal prices by supplying 20% of high purity nickel to battery producers throughout the world. Russia is also the world’s leading producer of battery-grade (Class-1) nickel.

However, growing prices will have no effect on EV adoption because gasoline and diesel prices are also rising due to common issues such as war, inflation, and trade friction.

What is your view on the arrival of solid-state batteries?

Anand Kabra: Solid-state batteries promise to deliver great specific energy and power density while posing significantly fewer safety and thermal stability concerns than liquid or gel-based lithium-ion batteries.

However, the use of such batteries at the moment is limited due to a major disadvantage.

The mass production and manufacturing of solid-state batteries are quite complex. Research regarding solid-state batteries is still in progress and the perfect material for the electrolyte with an ideal ionic conductivity is yet to be found.

While a commercially viable solid-state battery that can compete with traditional lithium-ion batteries is yet to be developed, we expect that this exciting new technology will be realized shortly.

While still in the minority of use, LFP batteries are expected to win the low to mid-priced EV market with sodium-ion batteries being the main competitor for LFP in low-priced EV models.

Solid-state batteries will remain focused on the high-priced EV models, while ternary batteries such as NMC/NCA will remain in the mid-to high-priced market.

We have next to no cell production in India currently for Lithium Batteries. How and when do you see that changing? What is the likely impact of this?

Anand Kabra: As is well known, the government announced a list of businesses that had been chosen to receive subsidies as part of a 181 billion rupee ($2.38 billion) plan to encourage the production of advanced battery cells. This is a component of an incentive scheme for businesses that establish or grow production facilities in India that was announced in 2020.

The selected PLI companies will have two years to put up their manufacturing facilities, according to the Ministry of Heavy Industries. It appears that cell will be available commercially by 2025.

However, there are a number of significant obstacles to local Li-ion battery production, Time is the first restriction. New battery chemistries are becoming more and more popular as battery technology continues to advance quickly. The related R&D is very technological.

The second significant issue is the lack of lithium metal, a key raw element used in the production of lithium-ion batteries. India now sources the majority of its lithium needs from China. By 2030, it is expected that there will be a significant increase in demand for these metals to meet the 135 GWh/year annual requirement of Vehicle batteries in India alone.

Thanks to the PLI scheme and cell production in India, the following key issues can be overcome, lowering hurdles to the adoption of electric transportation.

Currently, lithium-ion cells used in electric vehicles and other applications are supplied from China, Japan  and South Korea. There are a number of performance and cost problems with these cells. Many manufacturers ship low-grade cells to India in order to keep prices per cell at a specific level, which has negative effects on performance and safety.

The climate and driving conditions in India are also considerably different, which further hinders the performance of these cells. Even when we use low-grade cells that are not optimized for Indian terrain, we still wind up spending a significant amount due to other supplemental charges like shipping and customs.

The issue of transportation is another subject. These cells frequently experience electrolyte leakage as a result of sea transportation under uncontrolled storage conditions. Electrolyte leakage ultimately causes corrosion, boosts internal resistance, and raises safety issues.

How do you differentiate your offerings in the market? How do battery pack firms market themselves in the market today?

Anand Kabra: Battrixx-Future Energy, a Kolsite group firm, has been producing IOT-enabled lithium-ion batteries with cloud-based intelligent battery products and services.

It covers data analytics, Battery Management Systems, connected swapping stations, energy as a service, charging stations.

EV charging operators can manage and control assets more easily with Battrixx dynamic end-to-end EV Charging Management Solution. Customers, drivers, and charging stations interact through the Central Management System (CMS), a cloud-based operator portal with customized dashboards.