The lithium-ion Battery market has been witnessing significant progress, backed by a strong consumer base in electronics with smartphone shipments reaching another height, followed by diversification into EVs, industrial storage, and solar energy systems. Tech advancements in addition to solid-state research, are improving safety and efficiency.

In support of it, the government has been quite active in introducing, implementing, and investing in the initiatives that have been proven an aid to the market. In the coming years, investments of over INR 45000 bn investment are anticipated for the planned 50 GWh production capacity under the PLI ACC scheme.

Further, the private sector has also participated in various projects with appreciated investments driving domestic manufacturing even further.

Strong Demand in Consumer Electronics

• Lithium-ion batteries are the preferred choice for consumer electronics specifically for smartphones, laptops, smartwatches and more.
• Subsequently, India recorded 151.6 million smartphone shipments in 2022. Additionally, according to Ken Reserach analysis, India is projected to have 1 billion smartphone users by 2026.
• Moreover, in 2023, the smartphone segment accounted for 47% of the lithium-ion battery market share, followed by laptops at 35% and tablets at 8%

Diversification of Lithium-Ion Battery Applications

• Lithium-ion batteries are widely used in industrial applications for renewable energy storage and powering industrial equipment.
• Additionally, lithium-ion batteries have left a huge impact on the solar energy sector as the country’s solar power capacity reach 66,781 MW by 2023. These batteries are very essential in storing solar energy and providing a sufficient power supply.
• Moreover, ion batteries are an integral part of EVs (Electric Vehicles) manufacturing making the segment hold 55% of the share in 2022.

Innovation and Advancements in Battery Technology

• Advancements including Lithium Ferro Phosphate (LFP) and Nickel Manganese Cobalt (NMC) are known for their safety and long cycle life. These innovations are increasingly used in renewable energy storage, electric vehicles (EVs) and premium EVs.
• Further, challenges such as thermal management and performance under extreme circumstances have been solved with the development of solid-state batteries.
• Additionally, Safer and sustainable solutions/improvements with LFP, NMC, and solid-state batteries will take the market to scale at a CAGR of 13% in the forecasted period.

Government Policies and Investment Driving Domestic Manufacturing

• Under Production-Linked Incentive (PLI) scheme, the government has allocated over INR 450 Bn for developing a 50 GWh production capacity, with an additional 5 GWh for specialized battery production. It is expected to attract investments and speed up the establishment of advanced battery manufacturing facilities across the country.
• Power Global has invested INR 17.57 Bn to set up a 1,000 MWh lithium-ion battery plant in Greater Noida to target energy storage and electric vehicle (EV) applications.

• Additionally, Li Energy has allocated INR 10.98 Bn for a 1,500 MWh facility in Tamil Nadu, further strengthening the state’s position as a manufacturing hub.
• Over and above, Amara Raja Batteries has announced investments of INR 95 Bn for a lithium-ion battery manufacturing facility in Telangana over the next 10 years.

The lithium-ion battery market in India is set for growth trends it has never seen before, driven by a consumer base in electronics, diversification into EVs, industrial storage, and renewable energy sectors. Further, diversification into industrial and solar applications has expanded the market's scope. Along with that, technological advancements including LFP, NMC, and solid-state batteries, have helped the market stand firm.