IESA News

Two years. That’s how long Nitin Gadkari, India’s transport minister, believes India will take to switch from using fuel-powered buses to electric ones for public transport. Gadkari made this prediction in September.

That’s a bold prediction considering it has barely been a year since India started this transition. According to research think tank Intelligent Transport, there are 170,000 public transport buses in India, ferrying roughly 70 million people daily. The electric bus count, however, is just around 200, with another 170 set to hit roads soon.

This gap is an opportunity for bus makers. India’s electric bus market—which stood at $47.4 million in 2018—is projected to grow at a compound annual growth rate (CAGR) of 37.6% through 2024, according to management consulting company TechSci Research.

The opportunity is also evident in the government’s allocation of funds towards electric buses in March 2019 under its FAME II (Faster Adoption and Manufacturing of Electric vehicle) program. While aimed at driving the adoption of electric 2-, 3- and 4-wheelers, the focus of FAME II’s Rs 8,595 crore ($1.21 billion) budget is clearly on buses. Of the total corpus, Rs 3,545 crore ($500 million)—about 41%—is earmarked to subsidize the purchase of 5,595 buses for various state transport undertakings (STUs).

That’s 7X the budget allocation and 5,175 buses more than the government-sanctioned under FAME I early last year. This massive overhaul was a chance for Indian bus makers like Ashok Leyland, Mahindra and Mahindra, Eicher Commercial Vehicles Ltd, and Tata Motors to cement their leadership. But just like other EV vehicles in the industry, the old guard is being shown up by agile newcomers.

One, actually—Olectra Greentech.

More precisely, Olectra-BYD, an Indo-Chinese joint venture (JV) formed in November 2016. The JV won contracts for 290 buses under FAME I, leaving Tata in second place with 215*. Leyland was a distant third with 40 buses. No other manufacturers won tenders. Incidentally, Olectra-BYD has also delivered the most number of buses since, according to various people The Ken spoke to. As a result, Olectra-BYD controls nearly half the EV bus market, they estimated.

China-based BYD is backed by Warren Buffett and fuelled by state subsidies and bank credit. Not only does BYD account for more than 170,000 of the roughly 380,000 electric buses globally, but it’s also the world leader in EVs overall. This shouldn’t come as a surprise—the ecosystem for making electric batteries barely exists outside China and BYD’s battery manufacturing facility in the Chinese province of Qinghai is the largest in the country (and therefore the world). A battery pack is the most critical part of an EV, accounting for about 40% of the total cost.

Unlike with other sectors, India has not set any limits on foreign direct investment (FDI) in the EV space. Still, a tie-up with a domestic company has its advantages and BYD picked Hyderabad-based Olectra Greentech, a company that did not have any prior expertise in automaking.

Even though the Indian company has voting control in the JV, the Chinese company controls the flow of technology. BYD fits the battery and wiring into a bus chassis in its own factory in Chennai. This is then transported up the coast to Olectra’s factory in Hyderabad, where the rest of the bus is assembled.

The three-year-old JV has blossomed because of the well-oiled ecosystem BYD has back in China and its control over the supply chain. This is in stark contrast to India’s traditional bus makers. Volvo—still used as a noun for air-conditioned buses in India—is at the R&D stage when it comes to EVs. Leyland, which relied on battery-swapping technology, was caught off-guard as lithium-ion battery prices dropped rapidly, making their technology redundant.

The biggest problem for the electric vehicle industry, however, much like the solar industry, is its reliance on China—for batteries of the right specifications, in the right quantities, for the right price and on-time. Tata was almost blacklisted by the government for the late delivery of buses earlier this year.

“It is an entirely new ball game for new and old players,” says Aman Madhok, an analyst from tech-oriented research firm Counterpoint.

Indian companies are pulling out all the stops to prevent the rising Chinese giant. Tata, which has significant clout in industry lobby Society of Manufacturers of Electric Vehicles (SMEV), has been blocking Olectra-BYD’s entry, preventing its access to key policy decision-making, a person with knowledge of the matter said on the condition of anonymity. Tata, however, denies the allegation. But Olectra, which is a unit of a massive Indian conglomerate well-versed with winning tenders, is making its own fate. Ken has seen Olectra’s top executives walking into India’s offices of power. This extends to the business card of Olectra CEO Naga Sathyam sitting on the desk of a key official at Niti Aayog, the Indian government’s policy think tank.

Olectra, Tata and Leyland did not answer detailed questionnaires from The Ken, saying they were either in a “silent period” ahead of results or busy with tenders under FAME II. Their focus on the tenders is understandable, especially for Tata and Leyland, since all tenders have to be made under a bus-leasing model. Under this model, the OEMs run and maintain the buses and its charging infrastructure in return for a payment from the government at per kilometer basis—the very model that helped Olectra-BYD dominate FAME I.

Local marries global

The Indian auto industry’s current situation is similar to that of the early ‘90s. Indian automakers tied up with foreign companies and prospered. The tie-ups eventually led to technology transfers, like Hero Motors’ association with Japan’s Honda in the two-wheeler segment, or carmaker Maruti’s partnership with Suzuki that helped it become a market leader.

But the difference this time around is that the foreign players are predominantly Chinese companies and the tie-ups are with smaller Indian companies, some of which don’t even have experience in the auto sector or electric mobility. These tie-ups, though, are still advantageous for both parties, even though there is no FDI limit in the EV sector.

A tie-up with a local player could help reduce the foreign company’s initial investment by up to 50%, said a senior researcher who did not wish to be named as he is not authorized to talk to the media. It also helps in navigating governmental bureaucracy, the researcher added. This is especially true in the bus sector as central and state governments are the biggest purchasers and they don’t look fondly on Chinese companies.

“There are some sentiments in India which are not favorable towards China,” said the researcher.

So, it’s little wonder that domestic-foreign tie-ups have been on the rise. Take, for instance, Gurugram-based JBM Auto Ltd. The company has partnered with Poland’s Solaris PV to make electric buses in India. Its rival, Haryana-based Foton PMI, is also a JV between India’s PMI and China’s Beiqi Foton.

The Olectra-BYD combine, of course, is the most successful example.

Olectra Greentech’s parent company, Megha Engineering, and Infrastructure Ltd (MEIL), has cut its teeth in the power industry—a space bursting with bureaucratic red tape. The three-decade-old MEIL is no stranger to bidding for contracts, having won tenders for government projects like the Polavaram hydro-electric dam in Andhra Pradesh, among others.

But Goldstone Infratech Ltd, as Olectra Greentech was called before the BYD JV, had no experience in the auto industry. It used to make electric insulators, a key component in power distribution. So even though Olectra controls the voting rights, it’s BYD that brings the technological prowess. And considerable tech prowess, at that.

BYD has been in the electric mobility business since 2003, and in India since 2007. Its Chennai factory produces mobile components, solar panels, and forklifts, besides battery products and chargers. Today, though, the Chennai factory has shifted its production focus to buses, says an employee at the factory, who declined to be named as he is not authorized to speak to the media. Close to 40% of employees at the factory are Chinese, the employee added.

So why tie-up with a company that had no experience in the auto industry? “You can’t dictate terms if you partner with a bigger company,” said an industry consultant who did wish to be named.

BYD makes the chassis and battery packs, which constitute close to 60-70% of an EV bus’ value, the consultant estimated. This then goes to Olectra’s factory in Hyderabad, where the body and other fittings are done for the two models under production—the K7 and K9. This factory can manufacture 2,100 buses per year but, if necessary, could be scaled up to make 6,000 buses annually, according to a report by the Times of India.

With BYD’s expertise and supply chain in tow, Olectra was the surprise winner of the FAME I program. Its bus business raked in Rs 144.8 crore ($20.5 million) in revenue in the year ended March 2019, nearly as much as its insulator business’ Rs 145.5 crore ($20.6 million).

But, it’s not just a question of technological expertise. Winning a contract depends on one factor—making the most attractive bid.

Right place, right time

BYD’s entry into India’s bus market also heralded a new approach to tenders. Under FAME I, many bus makers placed bids that required state transport units, or STUs, to buy the bus outright and handle operational and logistical requirements themselves.

Not Olectra-BYD.

The JV placed their bids under the gross cost contract (GCC) model, commonly known as opex or leasing model. Here, the STUs lease the bus from the manufacturer and are responsible for providing only manpower and electric supply. The manufacturer runs and maintains the buses and the charging infrastructure as well as trains drivers. The STUs pay the bus makers on a per-kilometer basis. While some other manufacturers like Tata and Leyland also bid for tenders using the GCC model, BYD’s previous experience with the GCC model set Olectra-BYD’s bids apart.

For an outright purchase, the Department of Heavy Industries (DHI) provides a 60% subsidy and the STU bears the rest. Under GCC however, the STU gets up to 60% of the capital cost in equal instalments over the years—which means funds are disbursed in smaller amounts.

Under FAME II, DHI will pay up to 40% of the estimated cost of the bus, up to a maximum of Rs 55 lakh ($77,974), for standard buses, Rs 45 lakh ($63,797) for mid-size buses and Rs 35 lakh ($49,620) for minibusses. This subsidy is crucial when it comes to electric buses, which cost more than Rs 1 crore ($141,772)—double the price of a basic diesel bus. Even an air-conditioned Volvo bus—a decidedly premium offering—costs around Rs 85 lakh ($120,506).

The GCC model is a god-send for loss-making STUs across the country and BYD has pioneered it to operate buses across the globe. No surprise, then that, Olectra-BYD was able to outbid other manufacturers for the three biggest contracts under FAME I.

Like any other EV, the operating cost of an electric bus is cheaper than its diesel counterpart. The cost of running an EV bus is estimated to be around Rs 61 ($0.86) per kilometer, while the cost of running its diesel equivalent is about Rs 68 ($0.96), according to HM Shivanand Swamy, a professor at CEPT University, Ahmedabad.

Now, with Fame II—GCC isn’t an option but a mandate. This gives Olectra-BYD the upper hand, not only for its experience in running a bus service, but also the others’ lack thereof. Tata might even be looking at hiring a third-party to operate the buses for them, the consultant quoted above said, further adding to costs.

Still, it’s not a clear road ahead for Olectra-BYD. Rival companies have won tenders recently. In October, Tata won a contract to supply 300 buses to Ahmedabad under the GCC model, the biggest such contract so far in India.

Moreover, not all STUs are happy with the leasing model. The Karnataka government canceled Olectra-BYD’s 150-bus contract under FAME I as it concluded that the total cash outflow at the end would be higher than in an outright purchase model. Bengaluru Metropolitan Transport Corporation (BMTC) director Anupam Agarwal likened the situation to when it had awarded contracts to Volvo years back with the leasing model. It ended in failure, financially speaking, Agarwal told The Ken, declining to provide details.

The battery is the new engine

The key advantage Olectra-BYD has over its rivals and will have for at least a couple of years is a steady supply chain for battery technology. Indian manufacturers lack the knowledge and experience in sourcing and dealing with battery technology, was the refrain of various sources The Ken spoke with.

Tata was almost blacklisted by the government for the late delivery of buses under FAME I, which the company blamed largely on sourcing batteries.

As such, Indian companies partnered with Chinese battery makers two years ago when the technology was very nascent, said Debi Prasad Dash. He is the executive director of India Energy Storage Alliance, an industry body. This has made it difficult to switch to firms that can offer lower prices, Dash added. 

“Indian companies are talking to multiple companies from China where they can buy the battery,” said Dash. “Each company is giving them different specifications, different warranties, and different sizes. So they have not yet decided which specifications they require. It is not about battery availability, it is about the blindness about the technology of all the companies that are entering this space.”

Take Ashok Leyland, which partnered with Delhi-based swappable battery manufacturer Sun Mobility. When the price of lithium-ion batteries fell faster than expected, Leyland’s swap-tech became less viable. The company is now developing a bus that works on plug-in technology, a company official said on condition of anonymity.

While Indian manufacturers are coming around to developing the technology, fixing their sourcing and adapting to the GCC model, it turns out that STUs have their own set of worries.

Route identification is one. Congested routes are not economically viable and that could reduce the number of trips per bus, says BMTC’s Agarwal.

Charging infrastructure is another bone of contention, says Agarwal, even though, technically, charging stations can be set up in a planned manner given buses have predetermined routes. But FAME II does not specify the number of charging points or their specifications (fast charging or slow charging). Besides, with one charger costing about Rs 10 lakh ($14,177), bus makers would likely install charging points only in depots. So, what happens if a bus runs out of charge in the middle of a busy road? asks Agarwal.

“Who will be answerable to the people? Not the operators, but for us.”

 

 

IESA News

The government on Saturday said that it has awarded grants to the four projects selected in the second round of PACEsetter fund program.

The PACEsetter fund was constituted by India and the USA in 2015 as a joint fund to provide early-stage grant funding to accelerate the commercialization of innovative off-grid clean energy products, systems, and business models, the Ministry of New and Renewable Energy (MNRE) said in a statement

The Ministry of New and Renewable Energy awarded Grants to the awardees of the second round of PACEsetter fund program in a ceremony organized yesterday. MNRE Secretary Anand Kumar and the US Ambassador to India Kenneth Ian Juster co-chaired the felicitation ceremony.

In the second round of awards, a total of 168 Expressions of Interest were received. Out of these, four projects were selected for award of grants. The awardees include Society for Economic and Social Studies, New Delhi, Customized Energy Solutions India Pvt Ltd, Pune, The Energy  & Resources Institute (TERI), New Delhi and RaghavendraSuntech Systems Pvt Ltd (RSSPL), Bengaluru.

Stressing on the importance of access to energy for all, the US Ambassador said that innovation in off-grid and clean energy will improve energy access. Kumar appreciated the impact that the awarded projects would have on the common man. He also suggested that innovation realized through such projects could be replicated in other developing countries.




IESA News

The India Energy Storage Alliance (IESA) announced that India and Bolivia have signed a Memorandum of Understanding (MoU) for the development and industrial use of lithium for the production of lithium-ion batteries. As part of the MoU, Bolivia will support supplies of lithium and lithium carbonate to India, as well as joint ventures between the two countries for lithium battery production plants in India.

A statement, issued during the recent Bolivia visit of India’s President Ram Nath Kovind, said: “Both the countries agreed to forge mutually beneficial partnership to facilitate Bolivian supplies of lithium carbonate to India and foster joint ventures for lithium battery/cell production plants in India.” The two countries have also agreed to facilitate mechanisms for the commercialization of lithium carbonate and potassium chloride produced in Bolivia by Yacimientos de Litio Bolivianos Corporación (YLB – Corporación), the statement added.

With the MoU, the possibility of Indian companies setting up production capabilities in Bolivia goes up, as well as the import of lithium to India. Domestic production is also set to see a boost, from the automotive perspective. The arrival of hybrids and electric vehicles from as early as 2020 onwards, will force manufacturers to look at local production. Apart from Electric Vehicles, Renewable Integration, Grid Stability and behind the meter applications will boost Li-Ion battery adoption in India. India is expected to attract over $3billion in investments in the next 3-5 years for li-ion batteries and also witnessing additional investment for its ecosystem.

The President of India, Shri Ram Nath Kovind who was in Bolivia in March this year met with his counterpart Mr. Evo Morales Ayma and during the one-to-one discussions with him, the President said that he was honored to pay the first-ever State Visit from India to Bolivia. He thanked President Morales for special welcome and affection.

Subsequently, the President led delegation-level talks between the two sides. Speaking on the occasion, he said that it is encouraging to see that India-Bolivia bilateral trade has picked up in the last two years and it stood at US$ 875 million in 2018. About 60% of Bolivian gold is exported to India. Bolivia is the 8th leading trading partner of India in the Latin America region. He emphasized that there is a need to diversify our trade basket to further strengthen the bilateral trade.

In the final engagement of the day (March 29, 2019), the President addressed the India-Bolivia Business Forum. The President said that India has a focused business approach to the Latin American region. We hold the India-Latin America and Caribbean Conclaves annually to deepen our business collaborations. These Conclaves have served us well. Several Indian global majors have made entry into Bolivia through them, bringing cutting-edge technology, products, and services to the people. He noted that there are immense opportunities for collaboration between India and Bolivia in various fields such as automobiles, healthcare, IT, renewable energy, Lithium, agriculture, space, developing modern infrastructure- from railways, highways, waterways, airways to energy pathways.

In his address, the President said, “We are committed to transformational economic growth in India. But we want to be respectful of Mother Earth, of nature, in the same manner, and with same devotion as you have done. We want our progress to be propelled by clean technology and sustainable practices. We want growth and environment protection to go hand in hand. We have established the International Solar Alliance to develop clean pathways and to tackle climate change. We welcome Bolivia in the Alliance and look forward to creating a greener planet with its support and ideas. As part of this commitment, we have a target to produce 175 gigawatts of renewable energy by 2022, including 100 gigawatts of solar energy. We are developing our capacity and at the same time making available our services to fellow countries to tap renewable energy. We see opportunities for tie-ups with Bolivia in solar, wind and biofuel segments. Talking of environment and sustainability, we have an ambitious program to develop electric vehicles in India. And for this, we want to enter into long-term Lithium partnership with Bolivia. Indian enterprises are keen to mark their presence here as investment and technology partners – to develop lithium products and to master storage technology. We look forward to such promising ventures taking wings. India has gained vast expertise in developing modern infrastructure – from railways, highways, waterways, airways to energy pathways. This can also be a potential area for collaboration between our two countries.”

IESA News

The Minister of State for Heavy Industries and Public Enterprises, Arjun Ram Meghwal said that the Electric Mobility Mission will be implemented in phases based on feedback from the auto industry. He also promised all support to the industry on policy matters to ensure the smooth and efficient transformation of the automotive industry from internal combustion(IC) to electric powertrain. He informed that 3 lakh electric vehicles have already been sold under the FAME India Scheme.

Meghwal inaugurated the 3rd International Electric Vehicle (EV) Conclave at the International Centre for Automotive Technology (ICAT) in Manesar, Gurugram, today. The Conclave was held to create a knowledge-sharing platform to ensure flow of information at all levels in the automotive sector.

The EV Conclave organized by ICAT in association with India Energy Storage Alliance (IESA) has grown and transformed itself into a global event since its inception in 2017. Owing to the growth of electric mobility and in order to meet the demands of the automotive sector, the EV Conclave is organized with a focus on new trends and challenges in the field of electric mobility.

Industry News

India is gearing up to create manufacturing, R&D and testing capabilities in the batteries space and the recently approved production linked incentive (PLI) scheme will act as a catalyst to meet both domestic and export needs (once self-reliance is achieved).

The Union Cabinet recently approved Rs 18,100 crore PLI scheme for Advanced Chemistry Cell (ACC) battery, providing new opportunities in the consumer electronics, electric vehicles, and renewable energy sectors. It aims to enable setting up 50 GWh annual production capacity ACC manufacturing facilities and lead to net savings of Rs 2 lakh crores-Rs 2.5 lakh crores on account of oil import bill reduction.

Dr Rahul Walawalkar, president, India Energy Storage Alliance (IESA), told Telangana Today, “The ACC programme will enable Indian companies to take the first step to become part of the global advanced battery manufacturing ecosystem and attract global technology leaders and investors to invest in India. ACC batteries will be crucial for India’s energy security in the coming decade given its role in enabling renewable integration and e-mobility transition.”

The scheme is directly linked to production which will lead to creation of manufacturing capabilities in the country. The focus will be on stationary energy storage, mobility and consumer electronics sectors. Higher incentive is expected for higher performance batteries. The scheme allows flexibility for companies to upgrade the technology after five years and claim higher incentive to develop higher performance cells. This will not only meet the domestic value addition needs but also enable catering to global markets. The next 12-18 months are going to be crucial for Indian industry. The supply chain is set to improve significantly, Walawalkar emphasized.

Import substitution

India had been importing cells completely. In the last five years, the industry has started building capability for cell packs. In the last year, 5 GW hr (worth $600-700 million) of cells had been imported. This number could go to 100 GW hr in the next one decade. Majority of the cells are coming from China, Korea and Taiwan. Consumer electronics (cell phones and laptops), telecom towers, backup batteries, electric vehicles remain the major consuming segments of lithium-ion batteries. In the next 10 years, EVs will certainly dominate, particularly after 2025, he noted.

While the Department of Heavy industries is going to implement the PLI scheme, several other government departments and Niti Aayog will coordinate and monitor the implementation of the scheme in the country. Pan-India, Telangana, Karnataka, Tamil Nadu, Maharashtra and Gujarat are leading in the energy storage and EV space. Gradually States such as Rajasthan, Uttar Pradesh and Punjab are also trying to attract investments.

Building capabilities

He said, “India is on the path to improve design, research and development. IESA has been making efforts to build these capabilities in the country by 2022. The focus will be on energy density, compactness and long usage life. The industry is expected to significantly invest, so that niche technologies can be developed.”

IESA is also closely working with the government to ensure safety standards are maintained in making batteries that are used across verticals, particularly when the focus is going to be on high density. Testing labs for evaluating performance standards are being set up. Niti Aayog is also providing guidance in this direction. He said, “IESA has already set up three testing labs in Pune and is looking to replicate the lab model across the country and work with testing agencies and testing equipment companies.”

“These are crucial for tapping export opportunities. IESA is also rolling out initiatives to incorporate renewable energy in battery making plants. We are also looking into recycling/waste treatment and setting up zero discharge facilities of lead acid batteries makers,” he added.

Industry News

Electric vehicle manufacturer Ampere has announced its collaboration with eBikeGO and established an order from the e-mobility start-up for the supply of 2,000 electric scooters. The development trails Ampere seizing an order of 3,000 e-scooters from Bengaluru-based scooter rental start-up Bounce.

"Our partnership with eBikeGO is a significant step towards catering the increasing last-mile delivery demands from leading e-commerce platforms in the country," believed P Sanjeev, Chief Operating Officer, Ampere Electric.

He further that the firm has established a strong technology and service support to facilitate fast-growing EV subscription platforms such as eBikeGO.

"The initial order from them for 2,000 Ampere electric scooters is just the start, we can see this partnership going a long way ahead," he further.

Redefining the future of last-mile deliveries, there has been a substantial rise in demand for home deliveries, and this corporation impeccably suits last-mile logistics delivery support required by e-commerce players, held the company.

With this association, Ampere electric reinforces its presence in the fast-growing business-to-business (B2B) shared mobility service segment, it added.

"As an EV start-up, we endeavor to provide clean mobility solutions, Ampere is one of our trusted partners in our growth journey," believed Irfan Khan, Founder and Chief Executive Officer, eBikeGO.

He further that with easy rental options, now consumers will have more choice to be on the go even if they do not own a vehicle.

Industry News

Solar Energy Corporation of India (SECI), a dedicated Central Public Sector Undertaking for the solar energy sector under the Ministry of New and Renewable Energy (MNRE) has issued an expression of interest for identification and empanelment of agencies for the development of electric/ transformative mobility space in the country.

As indicated in the notice, an e-consultation meeting with the prospective participants is scheduled on November 6, 2020, SECI’s office through an online platform. The last date for submission of interest is December 7, 2020.

“SECI intends to empanel agencies for the identification and implementation of business opportunities in the electric/transformative mobility space in line with the national target of raising the share of electric vehicles (EVs) to 30 percent of a total number of vehicles by 2030 along with associated infrastructure,” SECO stated in the official EOI notice.

The objective of EOI is to onboard three to five agencies which preferably have proven track record prior experience in electric/transformative mobility and/ or in new/innovative technology development/scale-up.

The scope of the EOI mentions, business opportunities could be existing in demand creation, demand aggregation, setting up charging infrastructure, introduction of new and innovative products, market development, capacity building, etc. In addition to identifying the business opportunities, the empaneled agencies (EA) would be required to provide regular updates in this regard to SECI.

The business opportunities identified therein by EAs will be evaluated by SECI and if found suitable SECI would endeavor to facilitate further implementation of such opportunities on mutually beneficial terms and conditions for which a binding agreement may be executed between SECI and EA detailing the various terms and conditions.

The notice further clarified that unless extended, the empanelment shall be for a period of three years which shall be subject to regular reviews and modifications.

To be eligible to participate in the EOI, the application must have a positive net-worth as of March 31, 2020, or March 31, 2019. Additionally, they will also be evaluated by SECI based on criteria such as their experience in this space, the number of operational electric and transformative mobility projects, and proposed technology and business plans laid out by the company.

SECI has been the implementing agency for many of the Government of India schemes for the promotion of solar and wind energy projects where SECI serves as a demand aggregator and intermediary procurer of solar and wind power and supply of RE power on a back-to-back basis. One of the objectives of SECI is the promotion of new technology and the development of demonstration projects that reduces carbon emission and the latest EOI marks SECI’s foray in the electric and transformative mobility space.

Industry News

Between 2005 and 2018, patenting activity in batteries and other electricity storage technologies grew at an average annual rate of 14 percent worldwide, four times faster than the average of all technology fields, according to the new joint study published by the European Patent Office (EPO) and International Energy Agency (IEA).

The International Energy Agency (IEA) and European Patent Office's (EPO) joint report, “Innovation in batteries and electricity storage” highlights the growth in patenting activity in batteries and electricity storage over the past decade.

“More than 7,000 international patent families (IPFs) related to electricity storage were published in 2018, up from 1,029 in 2000,” according to the report. "While a consistently upward trend has been observed since 2000, there has been a notable acceleration since 2005, with an annual growth rate of 14 percent until 2018, compared with just 3.5 percent on average for all technology areas across the economy." (Figure E1)


The report shows that batteries make for an estimated 90 percent of all patenting activity in the area of electricity storage, and the growth in innovation is primarily driven by advances in rechargeable lithium-ion batteries used in consumer electronics and electric cars. The uptake of electric mobility in particular has been recognized as the main driver for the development of new lithium-ion chemistries aimed at improving power output, durability, charge/discharge speed, and recyclability.

It further highlights that technological development is also being fueled by the need to integrate larger quantities of renewable energy (wind and solar power) into the electric grid.

The study revealed that of the top 10 global application behind IPFs related to batteries, nine are based in Asia. These include seven Japanese companies, led by Panasonic and Toyota, and two Korean companies, Samsung and LG Electronics. Bosch, a German company, is the only non-Asian applicant to feature in the ranking.

The report shows that Japan and Korea have established strong leadership in battery technology globally and the technological progress combined with mass production in an increasingly mature industry has led to a significant drop in battery prices in recent years. Prices have declined by nearly 90 percent since 2010 in the case of lithium-ion batteries for electric vehicles, and by around two-thirds over the same period for stationary applications, including electricity grid management.

The report highlights Li-ion currently leads the battery technology patenting, accounting for 38 percent of all battery-related IPFs in 2010-2018.

“NMC cathode chemistry has seen the most innovative breakthroughs related to Li-ion batteries since the launch of mass-market electric vehicles, but potentially disruptive competitors are emerging outside the big companies and with more regional variation,” the study underscored.

According to the IEA’s Sustainable Development Scenario, for the world to meet climate and sustainable energy goals, close to 10 000 gigawatt-hours of batteries and other forms of energy storage will be required worldwide by 2040 – 50 times the size of the current market.

The study is the first joint report by the two organizations, as a part of the MoU signed between IEA and EPO for bilateral cooperation aimed at promoting innovation in sustainable energy technologies. As per the MoU, the two entities will publish a series of joint studies over the next three years to inform policymakers and the public about technology trends in areas that are critical for the energy transition and climate change mitigation.

Industry News

India plans to offer $4.6 billion in incentives to companies setting up advanced battery manufacturing facilities as it seeks to promote the use of electric vehicles and cut down its dependence on oil, according to a government proposal seen by Reuters.

A proposal drafted by NITI Aayog, a federal think tank chaired by Prime Minister Narendra Modi, said India could slash its oil import bills by as much as $40 billion by 2030 if electric vehicles were widely adopted.

The proposal is likely to be reviewed by Modi's cabinet in the coming weeks, said a senior government official, who was not authorized to comment on the matter and declined to be identified. NITI Aayog and the Indian government did not respond to requests for comment.

The think tank recommended incentives of $4.6 billion by 2030 for companies manufacturing advanced batteries, starting with cash and infrastructure incentives of 9 billion rupees ($122 million) in the next financial year which would then be ratcheted up annually.

"Currently, the battery energy storage industry is at a very nascent stage in India with investors being a little apprehensive to invest in a sunrise industry," the proposal said.

India plans to retain its import tax rate of 5% for certain types of batteries, including batteries for electric vehicles, until 2022, but will increase it to 15% thereafter to promote local manufacturing, the document said.

Though keen to reduce its oil dependence and cut down on pollution, India's efforts to promote electric vehicles have been stymied by a lack of investment in manufacturing and infrastructure such as charging stations. Just 3,400 electric cars were sold in the world's second-most populous nation during the last business year, compared to sales of 1.7 million conventional passenger cars.

The policy could benefit battery makers such as South Korea's LG Chem and Japan's Panasonic Corp as well as automakers which have started building EVs in India such as Tata Motors and Mahindra & Mahindra.

While China accounts for 80% of the world's lithium-ion cell production, India has introduced stricter investment rules for Chinese companies. It has also slowed down the approval process for some proposals after a deadly border clash between the two countries in June.

The draft proposal said annual domestic demand for battery storage and market size - currently less than 50 gigawatt hours and worth just over to $2 billion - could grow to 230 gigawatt hours and more than $14 billion in ten years’ time.

It did not offer an estimate of how many electric cars it expected to be on the road by 2030.

The proposal estimates it would cost firms some $6 billion over five years to set up manufacturing facilities with the support of government subsidies.

NITI Aayog has been the driver of several key India government policies including the planned privatisations of a swathe of state-owned companies.

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