Battery Demand Surges in India: A Growing Future Demand
India the host of over 130 billion people and a GDP that’s growing rapidly has also seen a significant increase in demand for batteries. Take it from electric vehicles to Government programs for use of green energy. Let’s take a quick peek to understand the same in a better way.
So, what are the main reasons for the increasing demand for batteries in India?
- Renewable Energy – The Indian government had set a goal of reaching 175 GW of renewable energy capacity by 2022. To do this, a majority of the investment is going to solar energy farms like one that could easily be spotted near Indian airports.
But generated energy needs to be stored and that’s where batteries and their demand also come into the picture. Additionally, there are forecasts that the solar cell market is expected to grow to 300 GW by 2025 at a CAGR of over 30%. - Electric Vehicles – The increasing demand for electric vehicles is the next biggest reason for the growth in demand for batteries. From 2 wheeled scooters to 4-wheeled cars, not only has the market increased significantly with a lot more people being able to afford a vehicle but the constant innovation has driven people to adopt EVs faster.
Add to this the several schemes and policies that are released by Indian Government to promote EV adoption like the FAME program has further boosted this demand as well.
According to sources, sales of electric vehicles in India have increased from 48,179 in 2020-21 to 4,42,901 in 2022-23 - Smartphones & Accessories – The use of smartphones has kept increasing, especially due to the pandemic. This has enabled more and more people to move aware from feature phones to smartphones for communicating, transacting, or simply doing business. In the latest Union Budget, it was said that there are currently more than 600 million smartphone users in India, and expected to keep growing by 10%.
From smartphones to wearable accessories, all of these devices use batteries and with such a huge opportunity the demand for batteries is also growing constantly.
According to MordorIntelligence, The battery market in India is expected to record a CAGR of more than 15% between 2023 – 2028. The report essentially talks about the use of technologies like lithium-ion and Lead-acid batteries to be primarily used for EVs, Industrial Batteries, and Automotives.
Despite, the opportunities and the demand the Indian battery market foresees there are also a few challenges that it needs to address.
- Lack of capacity to manufacture batteries locally. Currently, India is exporting most of its battery requirements from countries like China, Japan, and South Korea but to curb this, the Indian government has launched several policies. One such policy is Production Linked Incentive (PLI) program that promotes domestic battery manufacturing for increasing the country’s self-sufficiency.
- Lack of battery recycling and improper disposal of batteries. While India uses a lot of batteries, they still end up in landfills, this can be toxic, start fires, and also be very harmful to the environment. The Government has launched a lot of policies for promoting battery recycling and reducing environmental hazards but only time will tell how effective they will be.
Overall, to summarize.
1. The battery demand is driven by the government’s emphasis on renewable energy, the growing demand for Electric Vehicles, and the increased use of smartphones and wearable technologies which will keep growing in the upcoming years.
2. While there is great demand and opportunities to grow it also comes with significant challenges like lack of domestic manufacturing and improper disposal of old batteries which will play a crucial role in sustainable long-term growth in this sector.
