Lohum Plans 250-crore Investment in Capacity Expansion Over Next 3 Yrs

Lohum Cleantech, the lithium-ion battery manufacturer and recycler based in New Delhi, is planning to invest around 250 crores in the following three years towards expanding its manufacturing capacity, which currently stands at 300 MWh of batteries per year and 200-250 units a day, with aims to eventually venture into the production of batteries for four-wheeler electric vehicles. Readers might recall this interview with the company founder, where he had spoken about the massive potential in India for a recycling hub in particular. Clearly, the firm has found a lot more believers for its vision.

To meet the growing demand for electric vehicles in the country, a new unit is to be set up in Greater Noida where the current capacity is expected to be increased to a gigawatt-per-hour.

The company’s founder and CEO Rajat Verma explained the decision, saying, “What we had anticipated for 2022 capacity, we realised that our capacity will fall short. Immediately… we have to set up more capacity and that is what we are now in the process of doing both on the manufacturing and recycling side.” To establish the gigawatt-hour scale manufacturing facility and a 1000 tonne/day recycling facility, he added, the firm is looking to immediately set up an integrated facility over the next year, where, every day, a 1000 batteries will be manufactured and a 1000 tonnes of old feedstocks will be processed.

While speaking to Saur Energy International in July last year, Verma had explained how the company sources its raw materials by saying, “One of the beautiful things about India is a highly efficient recycling and sourcing market. Kabariwala’s and other specialised aggregators have their presence, both in the formal and informal supply chain. It is these set of aggregators who aggregate the batteries for us and provid them to us. We also work directly with organized recyclers, organized waste recyclers, and we also work directly with some of the organised OEM’s in the market who have large bulk consumers in the market who want to dispose of batteries. We are also developing relationships internationally, particularly in the US and China.”

As for investments in the new project, they will be made in stages. Verma explained, “In the very near term horizon, we are looking to deploy about another Rs 50 crore. In the next two to three years timeframe, we are looking to deploy an additional Rs 200 crore. All these will into enhancing capacities of battery packs for two, three and four-wheelers.”

While Verma did not reveal the partners’ names, he confirmed that the company had begun working on a pilot project to put together battery packs for the electric four-wheeler category as well, for which it has a couple of customers at the moment. If successful, this venture will help Lohum move beyond the manufacture of two-wheeler and three-wheeler battery backs that it currently specialises in. Expressing his enthusiasm about the EV market’s expansion, he said, “Things started looking up pretty well in the September-October timeframe and then a lot of EV models came out in the market. With petrol and diesel maintaining their high prices, the awareness around EVs has percolated at a much deeper scale than we all anticipated…In the next 3 to 5 year timeframe, I can be extremely bold and say new sales will probably be entirely driven by electric vehicles.”

Since two-wheeler and three-wheeler EVs are currently cost-competitive at the operational level as compared to their traditional counterparts, manufacturing finance is coming in and the cost of acquisition is likely to go down. But in the case of electric four-wheelers, Verma estimates, it will take them longer to become competitive against conventional vehicles.