India looks east to this new ally to relieve China's grip on EV batteries

Copyright © HT Digital Streams Limit all rights reserved. Ayaan Kartik 3 min Read 30 Jun 2025, 05:30 hours, the discussions are expected to focus on the development of a diversified supply chain for lithium-ion batteries used in EVs and energy storage systems. (Reuters) Summary More than a dozen major Japanese players of the EV battery and the critical mineral supply chain, including Panasonic, Mitsubishi Chemicals, Sumitomo Metals and Mining, are currently in India to explore partnerships with Indian businesses. With a global dominant China tightening some critical minerals used to produce electric vehicles (EVs), the Indian and Japanese companies are in Delhi this week to find a way out of the supply chain log, according to two people who are aware of the matter. Asahi Kasei and Nichia, more than a dozen major Japanese players of the EV battery and the critical mineral supply chain, including Panasonic, Mitsubishi Chemicals, Sumitomo Metals and Mining, is currently in India to explore partnerships with Indian enterprises. All of these businesses are part of Japan’s industry body, Battery Association of Supply Chain (BASC). From the Indian side, businesses “as Amara Raja and Reliance participate in discussions with the Japanese industry” said one of the above persons on condition of anonymity said. The discussions are expected to focus on the development of a diversified supply chain for lithium-ion batteries used in EVs and energy storage systems, as well as for critical minerals such as lithium and graphite, with discussions likely to investigate technological collaboration and joint R&D to counter China’s dominance. Mint cannot independently verify the complete list of Japanese and Indian companies that are part of discussions. Inquiries sent to the Japanese and Indian firms remained unanswered until purple time. For Indian businesses, the need to work with other countries became important because they struggled to get rare earth magnets from China, which imposed 90% of their global offer and imposed restrictions on their exports in April. In addition, several estimates have Peg China’s global market share in lithium battery production at around 80%, while Japan estimates about 10% share. However, experts are skeptical. Srihari Mulgund, partner at Consultancy Ey-Partthenon, said Indian players should look for technology transfer and jointly invest in efforts to localize battery technology. But partnerships with Japanese companies can only offer limited benefits, he argued. “Collaboration with Japanese players in the EV battery and the critical mineral chain offers limited scope due to the fact that China controls most of the value chain,” Mulgund said. “Mining, refinement and processing are dominated by China. Japanese players can help with battery material and technology, but their work was significantly on the hybrid front.” In 2021, about 55 businesses in Japan gathered to form the BASC to strengthen the competitiveness of the domestic industry in the battery supply chain. Although the total number of members in the group is not available, some numbers reported in public hold about 150 companies. Other important names include Nissan Motor Co and Toyotsu Lithium Corporation. The background is currently that Indian EV businesses import more than three-fourths of their batteries from China, especially from firms such as BYD, Catl and Eve. Other countries that provide batteries include South Korea and Japan. While Indian businesses are building their own battery factories that are likely to live between this fiscal and FY27, they are concerned about the ability to fit the prices of cheaper Chinese batteries, as domestic players are currently fully dependent on importing important raw material lithium. “I think everyone would have noticed that the pricing that is currently coming from China is very aggressive,” Vikramadithya Gourineni, executive director of new energy businesses at Amara Raja Energy, told analysts in a earnings call on May 30. ‘The prices of the cell, the prices of the Energy storage system (ESS). It is definitely a downward trend. ” According to an operations manager working on EV cells, India has expected batteries of domestic companies such as Amara Raja, Exide Industries and Ola Electricare to be 20-30% more expensive than Chinese counterparts that do not have to rely significantly on imports for gaining important raw materials. The country’s government set a target to reach 100 GWH of lithium-ion battery capacity that could feed the boom in EV sales, which touched nearly 2 million in 2024, which grew 27% at 2023, showed the data from the Vahan portal. In 2021, the government announced a production incentive scheme of £ 18,100 crore for the construction of battery capacity. Ola Electric, Reliance Industries and Rajesh exports are one of the firms that received a nod from the government to build the gigafactories. None of them have so far managed to reach the required milestones under the scheme and stand behind their schedule of commercial production. They have a possible fine from the government, but the businesses have quoted problems with the acquisition of raw materials and need technology to progress at the previously declared rate. Other firms such as Amara Raja, Exide Industries and Tata Group’s Agratas also build their own lithium-ion plants. The JSW group of SAJAN Jindal has also previously expressed interest in making an EV battery plant. Catch all the industry news, bank news and updates on live currency. Download the Mint News app to get daily market updates. More Topics #evs #india #japan #china Read Next Story