Research report on Manthan - Chemicals by Swarnendu Bhushan, Co-Head - Prabhudas Lilladher Capita
The dragon’s hegemony tough days ahead for battery value chain in India
Exactly a year back, we covered the collapse of Northvoltin our research. That was the most ambitious project of the West to challenge the dominance of the Chinese in EV battery manufacturing- a company founded by Tesla veterans on the back of a decade of advancements on Li-ion, Na-ion and Li-metal batteries, with secured funding of USD15bn and an order book of ~USD50bn, finally closing the shutters in Nov’24 with declaration of bankruptcy
We followed that piece by another thematic Battery Chemicals: Beyond the dazzle, where we highlighted overcapacities and poor profitability, thereby raising concerns on the viability of battery chemical value chains in India. And believe us, all along, we wished to be proven wrong. However, the developments appear to prove our predictions right.
In the latest casualty, JSW has highlighted that it is having difficulty in securing LFP technology. It had earlier planned a INR400bn investment in Odisha creating a 50GWh capacity. To quote Parth Jindal “But making the cell itself, which is the most important part of an EV, that technology on LFP is not available anywhere outside of China and right now they are guarding it like a weapon”. While JSW has categorically mentioned the challenges, few others including RIL have claimed to be on track
A domestic ecosystem would have been the best bet for Indian battery chemicals value chain through targeted focus on indigenization even if the cost of manufacturing was higher than that in China. An absence of this would bite the Indian companies hard. While it is still difficult to say how things would turn out for Indian battery chemical manufacturers, we remain cautious on the space given the difficulties.
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