Popularity of Electric Vehicles in India

Increasing demand for electric vehicles around the world has directly increased the demand for Lithium-ion batteries. Due to unavaialbility of Lithium reserves in India, it would be feasible only if a foreign company comes to the rescue. This foreign company can enjoy the monopoly and reap maximum profits with such huge market base. Although, it would take a lot of time in the set-up process and to break even after the huge initial investment, this would be profitable from the long term view-point. Government is continuously looking to expand in this sector as it wishes to produce 175 GW of renewable energy by 2022 and make a massive thift to Electric vehicles by 2030.

The whole world today is moving towards electric vehicles in all segments of the automobile industry, India has already seen an increase in such vehicle usage in the scooter and public transportation segments. It is believed that by the end of 2030, due to the availability of limited fossil fuel, there would be a shift in the market conditions from deisel or petrol fed vehicles to either hybrid, micro-hybrid or electric vehicles(EV).

The major raw material requirement for the production of such vehicles are the lithium ion batteries. Lithium batteries carry a high level of density and hence considered most favourable for this sector. Lithium is moostly present in salt lakes in countries like Argentina, Chile, Bolivia, China etc. Today China is the largest EV producing nation around and is the largest consumer of Lithium in the world.

No such resources of Lithium have been found yet. It is believed that the government is making continuous efforts with Bolivia and Argentina to set up joint ventures today, fulfilling demand for tomorrow. Inspite of continuous efforts nothing solid has turned up and India is still lagging behind in EV segment due to lack of infrastructure, partial knowledge, limited resources and lack of interest from the government in terms of subsidies and auto-sector industries.

Companies like Panasonic Sanyo (Japan), Contemporary Amperex Technology Ltd (China), BYD Ltd.(China), LG (Korea) are the biggest producers of lithium-ion batteries. It is now time, for such companies to think about India as a target market. The process is long but with the financial support from the government, results can be achieved in a few a years.

LG corporation already had a set footmark in the Indian consumer market, as it is one of the best rated company for electronic consumer goods like: microwaves, air conditioners and washing machines. It is possible for LG Chemicals to collaborate with Mahindra and Mahindra (only elecetric car seller in India), Exide or Amara Raja battery, the local battery producing companies to start production of lithium-ion batteries on a large scale.

Looking forward

• Availability of batteires for EV in India.
• Profit margins can be high due to product monopoly.
• Increased global market share, as India is one of the largest consumer of automobiles in the world.
• Decrease in the level of pollution with the increased usage of fossil fuels.
• Organised supply chain structure, deeply penetrated in every corner of the country will lead to increased reach to customers.

Obstacles

• Lack of government support could lead to decreasing interest of foreign companies.
• Infrastructure requirement is huge in EV segement as it requires charging stations and conventional systems for repair and installation.
• Lack of power supply to fulfill increasing demand.
• Conflict of interest between the foreign company and government as companies always look to optimize profits rather than development.

Hence, it can be said that a foreign company like LG Chem, which is already producing Lithium-ion batteries, if look towards Indian consumers can reap profits with the availability of deep supply chain networks, cheap labor resources, advanced factories with latest technologies and government support through subsidies and other incentives.