Government Policies and the Future of Lithium-ion Battery

by Vishal Gupta, CTO – Maxvolt Energy Industries Pvt Ltd


The Indian lithium-ion battery market is expected to grow significantly due to increasing demand for electric vehicles (EVs), renewable energy storage, and a sharp surge in the consumer electronics market. Influenced by these developments, major EV industry players are investing in battery manufacturing and recycling to strengthen India’s energy material reserves. 

The transition to electric vehicles powered by lithium-ion batteries is underway, and the India Energy Storage Alliance (IESA) is forecasting the market to reach $80 billion by 2030. Government initiatives like the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) programme and the Production-Linked Incentive (PLI) Scheme for Advanced Chemistry Cell battery storage are playing a crucial role in this futuristic change.

Falling lithium prices or the rising EV sector

India’s first lithium reserve discovery in Jammu and Kashmir and another in Degana, Rajasthan, presents a significant opportunity for domestic production. These reserves can meet 80% of India’s total demand, reducing reliance on China as a major supplier and making EVs affordable. The exploration aligns with India’s goal of establishing a robust domestic lithium supply chain and reducing dependence on imported lithium. By harnessing these reserves, India can lower production costs and enhance the affordability of EVs in the domestic market, mitigating supply chain risks and promoting sustainable growth in the EV industry.

Addressing recycling-related challenges 

India faces challenges in Lithium-ion battery recycling due to a lack of a structured regulatory framework and a lack of consumer awareness about proper disposal methods. A robust Li-ion battery recycling industry is a grave need for the long-term sustainability of this sector, as it reduces reliance on virgin resources, minimizes environmental impact, and fosters a circular economy for Li-ion batteries.  Simultaneously, collaborative efforts between the government, industry players, and environmental agencies are needed to address these issues. That’s why awareness campaigns and stringent regulations are being initiated to minimize the environmental footprint of discarded batteries. Start-ups are also adopting innovative approaches to recycling, such as efficient separation technologies and finding novel ways of recycling processes to improve the efficiency and economic viability of lithium-ion batteries.

Ground-breaking initiatives by government

The Indian government has made commendable efforts to promote domestic production of lithium-ion batteries. One significant initiative in this direction is relaxed FDI norms, i.e., allowing up to 100% FDI under automatic route in the manufacturing of ACC batteries. Another breakthrough is Khanij Bidesh India Ltd (KABIL), a joint venture business with three Central Public Sector Enterprises, which has been established to identify, acquire, develop, and process critical minerals and metals, such as lithium, cobalt, copper, and nickel. This strategic move is also aimed at reducing India’s dependence on imports. 

Electric Mobility Promotion Scheme 2024

The government has launched the Electric Mobility Promotion Scheme 2024 (EMPS 2024), an INR 500 crore scheme to promote electric vehicles. The scheme, implemented by the Ministry of Heavy Industries, will offer subsidies of up to INR 10,000 per two-wheeler for about 3.33 lakh two-wheelers and up to INR 25,000 for over 41,000 small three-wheelers. The financial support will be up to INR 50,000 for large three-wheelers. The scheme aims to boost the adoption of electric two-wheelers and three-wheelers from April 1 to July 31, 2024. The initiative aligns with the Atmanirbhar Bharat initiative and focuses on fostering a competitive and resilient EV manufacturing industry in India. 

Power-driven future outlook

The Indian government is aiming to have 30% of all modes of transportation electric-driven by 2030, a move that could create a market worth up to $80 billion for low-carbon technologies. In this realm, initiatives like the EMP and PLI scheme for ACC Battery Storage can contribute massively. In addition, accelerating the adoption of recycled lithium battery energy storage solutions is crucial for generating value from existing resources. All in all, the combined efforts by the government and industry players ensure an electrifying future for lithium-ion batteries and the trail-blazing EV industry of India.