Battery Reuse, Funding, and Skilling Among Areas That Could Steer India’s EV Growth

🔍Insights

Prithvi Durai, Apoorva Bajj

Mar 7, 2024 — 6 min read

Driving India's EV Growth: Focus on Battery Reuse, Funding, and Skilling

After a trailblazing performance in 2023, India’s electric mobility is set to be the hero performer yet again in 2024, even amid global slowdown worries and job cuts. However, the rush for EV vehicles has thrown open a new set of challenges for the sector. EV companies, component manufacturers, and researchers that StartupTalky spoke with list out some of the roadblocks that lay ahead.

Charging Infrastructure
Sourcing and Recycling of EV Batteries
Trucking Industry
Funding
Attracting a Talent Pool

Charging Infrastructure

While India’s EV makers have been experiencing roaring sales, the shortage of EV charging infrastructure is not only creating a gap for easier mobility but also stopping several potential EV owners. Be it non-functional charging stations or cars running out of charge and coming to a standstill, addressing EV charging issues has become detrimental to the further growth of the sector.

“The Indian government’s ambitious plans, coupled with private sector participation, are accelerating the deployment of charging infrastructure, thereby addressing one of the key challenges in EV adoption,” said Rohan Shravan, founder and CEO of Tresa Motors.

In July 2023, the Confederation of Indian Industries called for a dire need to increase the number of charging stations to meet the demand for transitioning to electrification of vehicles in the coming years. This would eventually lead to 1.32 million charging stations by 2030, the report said.

“At present, about 40% of total installed capacity in India is renewable energy based. On the other hand, the grid infrastructure is aging, and the power demand from electric vehicles has already started straining the grid,” said Akanksha Goluchha, lead - clean energy and e-mobility at the National Resource Defense Council’s India branch.

NRDC is a cohort of leading online activists, scientists, lawyers, and other environmental specialists to help the world confront the climate crisis.

“Intelligent charging solutions that include smart grids, smart meters, smart charging systems, wireless sensors, etc. can help schedule EV charging based on periods of high renewable energy generation,” Goluchha added.

The government-initiated National Highways for Electric Vehicles plans to electrify 5,500 kilometers of existing highways across 23 cities and 12 states.

India Electric Vehicle Market Size, 2022 to 2032

Sourcing and Recycling of EV Batteries

EVs rely primarily on lithium-ion batteries, which contain specific metals and minerals. As of now, India sources most of the EV battery components from China, which in turn makes it costlier by the time the EV hits the showroom.

To reduce India’s reliance on imports amid rising demand for EVs, Finance Minister Nirmala Seetharaman in her 2023–24 Union Budget exempted customs duty on capital goods and machinery needed to manufacture lithium-ion cells locally.

“Indian-manufactured cells are expected to be launched in 2024, this development will help reduce the cost of batteries, creating opportunities for unit profitability and, subsequently, price reductions for consumers,” said Sumeru Shah, Business Head, EV Two-Wheeler at Ecofy.

However, to make optimum use of the minerals stashed inside the batteries, India also needs better management of the retired battery cells.

“How do you dispose of these batteries when they're consumed in volumes like today? Today, we've got all these cars being crushed, and the metal from cars being reused. So there's a lot of sustainability that happens today. But with electric vehicles, that's still a challenge. How do you dispose of the batteries? The batteries that we use for our torches, our cell phones... how do we sort of dispose of them in a manner that it's sustainable and doesn't damage Mother Earth?,” said Anil Kempanna, Chief Executive Officer at Cientra, which offers solutions across semiconductors, embedded software, automotive, and telecom sectors.

Co-founder of electric bicycle company E Motorad, Sumedh Battewar, points to recycling batteries as an effective way to source battery components.

“The key solution to this is recycling and reuse. Today, this chain is broken. Today, even if a cell is short, I have no use for it; I have to throw it out. I believe that, with time, an ecosystem will get built up. Because this (recycling of batteries) has a lot of value where a business can be built,” Battewar said.

Trucking Industry

For India to successfully transition to clean mobility, trucks, and vehicles will play a key role in the transport electrification revolution.

“Almost 90% of our emissions from the transport sector come from road transport. And if you zoom down to the road transport sector as well, almost 10–15% is coming from trucks. So trucks have a direct relationship, so we have to look into these kinds of aspects to assess how we are going to decarbonize the sector as a whole,” said Narayankumar Sreekumar, Associate Director at Shakti Sustainable Energy Foundation.

In September 2022, India’s think tank, NITI Aayog, along with RMI, released a report - ‘Transforming Trucking in India’. The joint report pegged India’s trucks to more than quadruple, from 4 million in 2022 to roughly 17 million trucks by 2050.

Among a host of measures suggested by the report, one of them involved moving towards zero-emission trucks.

“Zero-emissions trucks (ZETs), including battery electric trucks (BETs) and fuel cell electric trucks (FCETs), offer a compelling alternative to the diesel trucks that dominate India’s road freight today. ZETs do not have tailpipe emissions and have lower operating costs, presenting an opportunity for India to showcase how the adoption of ZETs is economically efficient and better for air quality, public health, and the environment,” the report said.

Funding

Being a capital-intensive sector, any funds flowing into EV companies can come as a reprieve.

“In the coming year, 2024, we eagerly seek funding partners to propel our innovations to the next stage, marking another chapter in our journey towards revolutionary advancements,” said Bharath Anantha Srinivas, the CEO of Technovos Machinery Private Limited, a provider of sustainable commercial materials movement equipment.

It’s no surprise, then, that EV sector investments are on the rise.

Perpetuity Capital, a fintech company offering loans to EVs, and Mufin Green Finance plan to invest in 1,000 EV companies in India this financial year.

According to media reports, EV funding in 2023 reached a record of $169.4 million, up 79% year over year. However, for a sector that is touted to grow at a rapid pace, funding requirements also need to be commensurate.

“Going forward, India needs significant investor support to realize the $100+ billion EV opportunity. As the landscape evolves, investors need to evaluate potential assets based on five criteria: sustainable competitive advantage, GTM and distribution capabilities, customer feedback and brand perception, talent and culture, and manufacturing and supply chain strategy,” said a report by Bain & Company.

Attracting a Talent Pool

Skilling talent to meet the rising demand from the EV segment poses the next big challenge for the sector.

Speaking at the EV Expo in December, Minister of Road Transport and Highways Nitin Gadkari said India is likely to see over five crore jobs in the EV sector by the end of this decade.

A report by staffing and HR solutions company Adecco showed that, among other sectors, the EV segment has been hiring the fastest in the last five years.

“Upskilling and reskilling will be crucial for the electric vehicle (EV) industry. Our initial efforts are primarily focused on upskilling rather than skilling new people, where we are interacting with numerous academic institutions, colleges, and polytechnics. They have requested our assistance in terms of helping them upgrade the curriculum and plug in the credentials and National Occupational Standards (NOS),” Arindam Lahiri, CEO of the Automotive Skills Development Council (ASDC), said in an interview with the National Skills Network.

Conclusion

While the EV segment is all set to be the showstopper in this decade, easing some of the challenges, such as recycling batteries, smoothening infrastructure roadblocks, funding the sector, and upskilling talent, could ensure that India’s sustainable mobility sector turns into a force to reckon with.