Tesla's India Gigafactory to depend on imported Lithium

Country does not have reserves of rare metal needed in making lithium-ion batteries

Tesla Motors Chief Executive and Product Architect Elon Musk’s plan to set up a Gigafactory in India should also factor in imports of Lithium, the rare metal used for making batteries to pack more power and longer duration in relative smaller boxes, say analysts.

India does not have reserves of the rare metal needed for making lithium-ion batteries, critical for the country in its rural electrification programme using renewable energy sources like wind and solar.

“From a manufacturing-in-India perspective, the country doesn’t have any Lithium deposits, so it is going to be hard. Unless we import Lithium ore, which is available in Bolivia, Argentina and Australia, manufacturing cannot be supported in India,” says Mridula Dixit, principal research scientist, Centre for Study of Science, Technology and Policy (CSTEP).

Australia could be a potential supplier of Lithium ore, amid the country’s improved relations with Canberra, with which India has signed a pact for supply of Uranium to power its nuclear reactors.

“We are not well-placed in terms of raw materials. The supply chain needs to be worked out. Also, making the batteries requires a very controlled environment,” says Dixit, who has studied lithium-ion technologies extensively. “Given India’s lack of expertise, I see global manufacturers bringing in their technology and manufacturing processes first, in the next five to 10 years; only after that would we be able to have local players gaining expertise and beginning to manufacture in India”.

Tesla, the electric car company founded by Musk, is setting up the world’s largest lithium-ion factory in the US’ Nevada desert. It will produce more batteries in one facility than the world’s total production in 2015. The plant will roll out batteries next year.

Musk recently tweeted that “Given a high local demand, a Gigafactory in India will probably make sense in the long term.” His comments came against the backdrop of Prime Minister Narendra Modi’s visit to the Telsa factory to seek technology for storing solar and wind power. India has set an ambitious target of 100 Gigawatt of solar power generation by 2022.

Energy storage is not yet a mandate when setting up renewable energy projects in India. Redox-flow batteries are only now beginning to be integrated into rural photovoltaic micro-grids, but they are far less efficient than lithium-ion batteries.

Tarun Mehta, co-founder of Ather Energy, an electric vehicle start-up, believes lithium-ion batteries will compete with lead acid ones in cost. While Tesla is in the process of setting up one Gigafactory, he believes there will be need for hundreds of those.

It’s simple maths. “One Gigafactory can produce just enough cells for half a million Tesla cars. Globally, we produce 65 million cars and a lot more two-wheelers. If all of them were to go electric over the next decade or two, you are looking at 100-plus Gigafactories at least,” says Mehta, who is aiming at disrupting the two-wheeler electric vehicle segment in India.

India not getting a Gigafactory will be a “major anomaly” adds Mehta, as he suggests global demand will see a rise of 100 to 150 such massive lithium-ion manufacturing plants in coming decades.

“What the government has to do is providing incentives, since these players are starting from scratch. They really have to set a road map in terms of stimulating local demand. But I think that is already there,” says Dixit.

Under its National Electric Mobility Mission Plan (NEMMP) 2020, India has set a target of having 6-7 million electric vehicles on its roads, most of which would be two-wheelers.

SOLAR DRIVE NOT EASY

• India does not have reserves of Lithium, a rare metal needed for making lithium-ion batteries
• Australia could be a potential supplier of Lithium ore, amid the country’s improved relations with Canberra
• Global manufacturers are seen bringing their technology and manufacturing processes in five to 10 years; only then could local players gain expertise and produce here
• Tesla is setting up the world’s largest lithium-ion factory in the US’ Nevada desert; it will produce more batteries in one facility than the world’s total production in 2015.
• Tesla’s Elon Musk had recently tweeted: “Given a high local demand, a Gigafactory in India will probably make sense in the long term”
• India has set an ambitious target of 100 Gigawatt of solar power generation by 2022