AR, India's second-largest battery maker, plans to build a lithium-ion battery assembly plant

Amara Raja Batteries Ltd, India's second-largest traditional battery maker, will build a lithium-ion battery assembly plant as part of
a plan to tap India's electric vehicle power supply market.

It is said that by 2030, the size of India's electric vehicle power supply market will grow to $300 billion
.

The battery manufacturer is building a 100 MWh assembly plant in the southern state of Andhra Pradesh, and the company is working closely
with the Indian Institute of Technology in Chennai, India.

"Incubation work is currently underway because we are in its infancy from a market demand and product development perspective," said Vijayanand, CEO of the company, "We are very focused on establishing solutions for the early stages of vehicle electrification while working
with OEM projects.
" ”

In India, about 3 million fossil-fuel-powered passenger cars are sold each year, but automakers including Mahindra & Mahindra Ltd.
, Tata Motors Ltd.
and Ashok Leyland are producing electric vehicles
.

In addition, overseas companies such as Hyundai Motor Corp.
and Suzuki Motor Corp.
are considering entering new market segments as the government plans to make new energy vehicles account for about
one-third of its car ownership by 2030.
However, this transition will be gradual
.

NITI Aayog said in June that the country's electric vehicle policy should be geared towards two-wheelers, three-wheelers and public transport because it has a relatively low car ownership
.
At the same time, the government also needs to support the establishment
of charging infrastructure.

Amara Raja expects the battery market for e-rickshaws (small private three-wheeled taxis) to grow
at a CAGR of about 20% over the next five years.
The new lithium-ion battery assembly is expected to commence operations by the end of this fiscal year, in March
2019.

"There are currently no lithium-ion battery production plants
in India.
Amara Raja still needs to import batteries from manufacturers like LG Chem and Panasonic to assemble battery packs," said Ali Izadi-Najafabadi, head of smart mobility at Bloomberg New Energy Finance.

This suggests that Amara Raja is primarily interested in winning demand for the second phase of the FAME program, which is expected to subsidize a limited number of electric buses and tricycles
.
”

Indian Prime Minister Narendra Modi will announce this week the second phase of the country's accelerated adoption and manufacturing of (hybrid) electric vehicle (FAME) schemes, which include a subsidy scheme for electric vehicles of Rs 550 crore
.

According to the global outlook released by Bloomberg New Energy Finance in May, by 2040, more than half of global new car sales and one-third of the world's car ownership, equivalent to 559 million cars, will be electric
.
Bloomberg New Energy Finance expects electric vehicles to account for around 7% of car sales in India by 2030 and 27%
by 2040.