Co-founder and chief executive of Attero Recycling, Nitin Gupta, believes that the opportunity in India to recycle lithium-ion batteries, used in electric vehicles, will be enormous in the coming years. His statement comes as the country gradually transitions to more environmentally friendly transport.
The market growth potential is huge. His battery recycling company has already set out plans to expand beyond India and invest $1 billion to seize international market opportunities by setting up lithium-ion recycling plants in the US, Indonesia and Poland.
“The tailwinds that are positive for the sector are: one, the huge demand in the world today for lithium-ion batteries, whether it is EVs, whether it is energy storage, or consumer electronics,” Mr Gupta said.
“Coupled with that is the fact that there is a supply pressure on critical battery materials like cobalt, lithium, graphite [and] nickel.”
Put together, both these factors mean there is a lot of interest from the business and financial community to “figure out the right solution for recycling”, he said.
Attero's lithium-ion recycling capacity in India is 3,500 tonnes per year and the company plans to boost that to 11,000 tonnes before the end of this year. The company, which counts car makers Maruti Suzuki, Tata Motors and Hyundai among its clients, has already grown its India operations more than threefold since last year, when its capacity was capped at 1,000 tonnes.
Attero aims to capitalise on the rising need for recycling, as the use of lithium-ion batteries increases, particularly driven by rapid growth of EV adoption. JMK Research estimates that the annual lithium-ion battery market in India will grow 37.5 per cent a year to reach 132 gigawatt hour in 2030, creating a $1bn opportunity for recycling. A few other companies are also trying to become involved in lithium-ion recycling in India, although the sector is still at an early stage of growth.
“Definitely a lot more investment will come and lot more companies will start up” in the sector, Mr Gupta said.
While recycling of batteries is a commercial opportunity, it has an ever bigger environmental value. Toxic elements of batteries can be dangerous to people and the environment if they are not disposed of properly. Mining the elements globally required for lithium-ion batteries also takes a toll on the environment.
More companies entering the fray will not only reduce the environmental impact, but will also play a “major role in EV adoption”, said Amit Das, founder of Electric One Mobility, which sells EVs in India. “Unless and until you complete the cycle of production usage and recycling, adoption is not going to work.”
One of the main hurdles to electric car ownership in India — a highly price-sensitive market — is that EVs are significantly more expensive than conventional vehicles. The battery accounts for about half the cost of an electric car. India largely depends on imports of lithium-ion batteries, given its manufacturing of the products is extremely limited. With lithium being in short supply globally, the cost of batteries is rising further, adding to the challenge of transitioning to electric cars in India.
The Indian government aims for the EV share to reach 30 per cent of all private cars sold in the country by 2030. But the pace of transition is far behind countries such as China.
“India must come to the forefront of robust Li-ion battery recycling infrastructure because it is the need of the hour,” said Puneet Jain, founder of Natural Battery Technologies, a Rajasthan-based manufacturer of lithium-ion batteries.
Mr Jain is among entrepreneurs looking to boost production aggressively next year.
He said: “India is poised to become one of the biggest consumers of Li-ion batteries, so we are expecting a lot of imports of these cells and minerals in the coming years. It is crucial for us to develop sustainable ways of recycling these batteries to make India self-reliant in this sector.”
The road is fraught with challenges and achieving a five-fold increase in production capacity next year is an uphill task, Mr Jain added.
“With only a handful of lithium mining facilities across the globe and a growing market size, the cost of gathering the resources for mass production … [of batteries is becoming] costly and competitive” he said.
“It is rather difficult to compete for in terms of price when big sharks of the sector place their bid because they have the capacity to buy in huge volumes.”
Recycling batteries is equally important for India to develop the country into a hub of EV manufacturing.
“Recycling is critical, as it helps in reducing the dependency of the Indian EV industry on importing raw materials or fully manufactured batteries in the country,” said Shrikant Shinde, founder of GoGoA1, an Indian company specialising in electric and solar-powered vehicles and their components.
“It is also hard to mine for lithium and cobalt in India. Recycling will also help to reduce the imports of lithium, which will put less burden on the economy.”
The recycling industry will also help to create much-needed new jobs in the country, Mr Shinde said.
GoGoA1 aims to set up its own battery swapping centres across the country and work with people and companies to establish battery manufacturing and recycling centres, Mr Shinde added.
“It is a challenge, as well as an opportunity, for car makers to have the recycling capacity to secure their supplies for batteries,” Ankit Mittal, chief executive of Sheru, an e-mobility start-up, said.
“For India’s own internal needs, as well as for its businesses, it is critical that battery recycling gets prime importance.”
It is also “crucial” for the “energy security of the country”, he said.
“In the absence of localised production of this crucial component [lithium-ion batteries], there are added complexities to sourcing it from elsewhere,” Mr Mittal said. These include supply chain disruptions seen in the recent past, he said.
Recycling of batteries is also vital to starting India's “circular economy”, said Utkarsh Singh, co-founder and chief executive of BatX, which has a recycling capacity of 4,000 tonnes of lithium-ion batteries a year.
“We will be able to be self-reliant and we can bring down the costs,” he said.
Given the growth potential of the recycling market in India, industry experts say the country should not miss out on the chance to scale up the business, which is currently concentrated in China and Europe.
However, policy decisions are needed to develop a regulatory regime for rapid growth of the sector.
“The government regulations, which are very, very well defined in Europe and the US, have not been put into place in India,” said Sambit Chakraborty, a member of the advisory board of Indigrid Technology, an EV ecosystem enablement company.
The Indian government, however, has drafted rules for battery waste management, which are expected to come into effect in the near future.
Technical and financial support for the sector could also increase the pace of its development in the country, experts say.
“The extraction of materials in lithium-ion … is a very chemically-driven process,” said Mr Chakraborty. “It's fairly technical, and the plants need a lot of investment. In multiples of millions of dollars.”
Attero, however, remains undeterred, and Mr Gupta said that his company is doing recycling in the most “environmentally friendly manner”.
“We want to be the dominant player in the world,” Mr Gupta said. “That's why we are expanding. We want to get to a 10 per cent global market share in the next few years.”