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EV And Electric Battery Prices To Go Down After Massive Lithium Find In India

We take a look at the Nexon EV to see how indigenous lithium mining and production could help make India’s favourite EV more affordable

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In breaking news, researchers have discovered a massive lithium resource of 5.9 million tonnes in Jammu and Kashmir. This is great news for EV makers in India, where EV batteries are currently imported from overseas, resulting in high customs duties that jack up the prices of these cars. 

It’s too early to say how the Geographical Survey of India’s (GSI) finding will facilitate lithium (Li) mining, refinement, and, eventually, EV battery production in the country. Nevertheless, we can take a look at the progress made globally in Li mining which has helped make EVs more affordable. 

Global trends: EV battery prices going down

Data source: Bloomberg

A global rise in the demand for EVs, driven by factors such as government incentives, has led to an increase in lithium mining. This has brought down the per-kilowatt-hour price of lithium ion batteries to record lows, reaching an average of USD 132 per kWh (around Rs 11,000/kWh). While these figures did rise in 2022, reaching USD 151/kWh (around Rs 12,452/kWh), it’s still much lower than what you might have to pay to get an EV’s battery pack replaced in India, as discussed in the next section. 

Example: Tata Nexon EV prices now vs the future 

For example, let’s look at the Tata Nexon EV (Prime) powered by a 30.2kWh battery pack. One of the EV’s customers, who had their SUV’s battery replaced under warranty, shared that it costs Rs 7 lakh. That translates to a battery cost of just over Rs 23,000/kWh, nearly twice as much as the global average price in 2022. 

With localised lithium mining, the cost of battery production will inevitably go down, and the benefits of that will be passed on to customers. 

Image used for representational purposes

If government policies and the industry are able to bring down the battery cell and pack’s pricing to global levels, even the 2022 prices (USD 151/kWh), a 30.2kWh pack for the Nexon EV would cost Rs 3.76 lakh, a decrease of 46 per cent! Since around 40 per cent of an EV’s cost is the battery’s price, it could make the Nexon EV Prime, currently priced from Rs 14.49 lakh (ex-showroom), more affordable by a few lakh rupees!  

The GSI’s discovery of lithium reserves in India is a major step in the goal of making EVs more affordable and commonplace in India. With major carmakers setting up EV and EV battery production units in India, we are hopeful that the price gap between EVs and ICE vehicles will continue to grow smaller in the coming years.

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