India’s First Li-ion Battery Plant in Karnataka

Vikram Handa, son-in-law of steel tycoon Sajjan Jindal, set up Epsilon Advanced Materials Pvt in Karnataka in August last year to become the first manufacturer of lithium-ion battery parts in India. Handa’s investment in the plant will be a whopping Rs 60 billion ($807 million) so that 1 lakh tonnes of synthetic graphite anode can be produced by 2030- some 10% of global demand.

Epsilon Advanced Material, a manufacturer of advanced cell chemistry materials, first qualified as a supplier in the global Li-ion battery supply chain in February this year when it received its first order for the anode precursor material from two major anode manufacturers in Japan and China. But what is an anode? In a typical lithium-ion battery, there is an anode, a cathode, separator, electrolyte, and two current collectors (positive and negative). The anode and cathode store the lithium. The electrolyte carries positively charged lithium ions from the anode to the cathode and vice versa through the separator. The anode is the negative or reducing electrode that releases electrons to the external circuit and oxidises during the electrochemical reaction. The cathode is of course the metal ion.

Epsilon Carbon, the parent company, aims at becoming the world’s first vertically integrated and sustainable anode material producer in the Lithium-ion battery industry with a plan to expand synthetic graphite capacity to 35,000 MT by 2025. The firm is targeting sales volumes of 10,000 metric tonnes of anode precursor material in FY22 with exports being a significant contributor of the sales. 

China, the biggest producer of anodes, imports raw materials from many countries, including India, to supply 80% of the world’s demand. Here’s where Handa’s vision steps in as he aims to transform the country from being a minerals supplier to a battery materials manufacturer. Given that the Indian government wishes to lure manufacturers from China and its Transport Minister, Nitin Gadkari, has promised a new battery policy ‘soon’, this project has come along at the right time.  

Expressing his enthusiasm for India’s battery space and auto market, and speculating about how long (2-3 years in his estimation) it would take for investments to become sizeable, the 40-year-old entrepreneur said, “India has great scope for the production of electric-vehicle batteries locally because it has access to the raw materials, a $20 billion manufacturing incentive plan, a proposed battery materials policy and improving prospects for demand,” He added “If adoption of EVs picks up in India and tomorrow Tesla comes and sets up a factory, then a big chunk of the anodes will be utilised in the domestic market. We’re confident that the Indian market will develop and we will have first mover advantage.”

EV sales are indeed set to go up over the next decade as their acceptance around the world grows, including India, which expects 25% of all vehicles to be EV’s by 2030. Automakers Mahindra and Mahindra believe that EVs will overtake gas guzzlers as prices become more aligned and infrastructure and technology improve, rendering domestic supply essential. Many Indian automakers, including startups like like Bhavish Aggarwal’s Ola Electric Mobility Pvt, have begun producing EVs in a bid to counter the country’s severe air pollution. However, in order to facilitate large-scale adoption of EVs, infrastructural progress is essential. 

India currently has some battery assembly plants but no cell manufacturers, for which we are dependent on China. Handa explained that the country has the expertise needed to make the cells as well as plentiful raw materials like aluminium, copper, electrolytes and nickel, the key elements for batteries, besides lithium which is a small part of the whole raw material that goes into the cell.