Yet, this enthusiasm has since moderated, redirecting attention to a vital component of the technology: the batteries.
As the world moves away from fossil fuels and adopts EVs, the importance of batteries has taken centre stage.
The demand for batteries in major automotive markets is rapidly increasing, creating tonnes of opportunities for EV battery manufacturers.
However, with increasing demand and low availability, many manufacturers, including big conglomerates, are considering building their battery gigafactories or partnering with other companies to address the supply issues.
This race is further speeding up with three stocks entering the race.
#1 Hindalco
First on the list is Hindalco.
Hindalco Industries is an Indian aluminium and copper manufacturing company, a subsidiary of the Aditya Birla Group.
Hindalco is the world’s largest aluminium rolling and recycling corporation, as well as a major copper player. It is also one of Asia’s top primary aluminium producers.
In a proactive move, the company has thrown its hat into the EV ecosystem.
On 12 December 2023, Hindalco announced its plans to invest ₹8 billion (bn) to set up a battery aluminium foil plant in Odisha as it evaluates opportunities in the electric mobility value chain.
The Odisha unit will be located alongside a 25 MW solar power plant and can access additional solar energy from a 400 KV national grid connection.
This 25,000-tonne plant will be commissioned by July 2025.
Hindalco expects national demand for battery-grade aluminium foil to reach 40,000 tonnes by 2030, prompting their foray into this space. The unit will initially focus on exports.
The target market will be both abroad and domestic.
Hindalco is in the process of qualifying as a supplier with lithium-ion cell manufacturers in India, Europe, and the United States.
Hindalco has also signed a memorandum of understanding (MoU) with Phinergy, a metal-air battery technology firm, and IOC Phinergy, a joint venture between Phinergy and the Indian Oil Corporation.
The MoU commits to research, development, and pilot production of plates for aluminium-air batteries and recycling of aluminium after usage in batteries.
Going forward, the company is focused on downstream expansions in India, with an emphasis on increasing contributions from value-added products.
This strategy aims to enhance profitability and protect the company from fluctuations in aluminium prices.
Further, it expects to sustain its positive momentum in the copper business, driven by increasing volumes, robust demand, and improved TC/RC (Treatment Charge/Refining Charge) margins.
#2 KPIT Technologies
Second on the list is KPIT Technologies.
KPIT Technologies is a mid-sized IT firm that primarily caters to the automotive industry. It offers software solutions for electrification, autonomous driving, connected vehicles, software standardisation, and vehicle engineering and design segments.
On 12 December 2023, the company unveiled sodium-ion battery technology.
The technology, developed in-house by researchers at the city-based company over the last eight years, will be put through external testing and deliver revenues after a year.
KPIT is the first company in India to come out with the technology and only the fourth in the world to possess a proven technology solution for sodium-ion battery storage.
The company opted for a different approach to its project by bringing on board electrochemists, a departure from its usual practice of hiring software engineers.
They conducted extensive testing on various chemical compositions before ultimately selecting the more readily accessible sodium.
This includes the ability to charge a vehicle for shorter trips in less than half an hour, thus making it more cost-effective and also more remunerative for the driver as more trips can be undertaken on the same vehicle in a day.
The overall cost of the battery will be up to 30% lower than the present alternatives, and the company is in talks with both existing auto industry clients and those interested in other applications of energy storage.
In the development stage, the technology has been tested internally in a smaller group and in the next phase, which lasts about 6-9 months, it will be tested on select vehicles outside.
The company will also be marketing the technology in export markets in Europe and East Asia as the biggest opportunities.
Going forward, the company is actively seeking partnerships and acquisitions to bolster its capabilities and expand its reach.
#3 Servotech Power
Last on the list is Servotech Power.
Servotech Power Systems is an India-based company engaged in the end-to-end manufacturing, procurement, and distribution of advanced solar products.
The company plans to establish its manufacturing facility in the GCC (Gulf Corporation Council) region. This facility is currently undergoing the sampling, certification, and registration process.
Additionally, the company is setting up a new EV plant in Uttar Pradesh with a manufacturing capacity of 10,000 EV DC chargers per year.
This facility will not only manufacture chargers but will also support the company’s future R&D initiatives. In support of this, the company has committed ₹3 billion in investment.
The company has issued warrants worth ₹750.6 million at ₹83.4 per warrant to set up manufacturing capacity and to support R&D activities.
Apart from this, the company has filed two patents for EV charger technology. These patents enable users to fast charge any GB/T Bharat DC 001 vehicle based on 72v/96VDC through a CCS2 connector using a small additional gadget.
Servotech Power will also focus on developing a model for constant engagement with universities and IITs to promote innovation.
In the next 2-3 years, the company plans to establish 5,000 charging stations under its subsidiary, Servotech EV Infra, responsible for developing a robust charging infrastructure.
As a supplier to many oil marketing companies (OMCs) and original equipment manufacturers (OEMs), Servotech Power already has a significant presence across India. However, the company envisions expanding its own network.
Conclusion
India has proactively recognized the central role of batteries in the overall sustainability of electric vehicles.
NITI Aayog, the Government of India’s policy think tank, has introduced a Battery Swapping Policy, focusing on maximizing their use and promoting end-of-life recycling.
This policy involves providing research and development support with grants for various activities, including material modelling, electrode and electrolyte synthesis, material characterization, lab-scale prototype testing, and recycling processes.
To further boost electric vehicle (EV) adoption in the country, the government is considering introducing another production-linked incentive (PLI) scheme for batteries, as per the Union Minister of Power, New & Renewable Energy.
This initiative will further strengthen the company’s position in the EV battery space.
Moreover, with an upcoming election in 2024, there’s an added layer of uncertainty and potential policy shifts that could impact the stability and benefits of these schemes.
Therefore, it is imperative to conduct thorough research before making any investments.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com