India’s net imports of petroleum products was $11.9 Billion in December 2022, according to the Petroleum Planning and Analysis Division of the Government of India.
Lithium Reserves: A Great News for India’s Automobile Future
Finding a resource, however, is insufficient. India must create a complete manufacturing, engineering, and chemical environment around itself in order to control the full stack for EV transportation in the future.
We should take advantage of the huge automotive industry India already possesses to develop the essential elements of the country’s electric car stack.
It’s great news for India since the Geological Survey of India has recently reported finding significant lithium resources in Jammu’s Reasi district. But, if India decides to harvest the lithium ore despite environmental concerns, we would be wise to learn from the mistakes of other countries that have fallen victim to the natural resource traps and not waste this discovery.
India’s over-reliance on Energy Imports
Energy importation has been an ongoing necessity for India. In December 2022, India’s net imports of petroleum products were $11.9 Billion, based on the Petroleum Planning and Analysis Division of the Government of India.
Extrapolating from this, it is estimated that India will invest between $120-150 Billion yearly on petroleum energy imports, based on current prices for the “India basket” of crude oil. Due to the conflict in Ukraine and India’s substantial discount imports of almost 10 times more Russian crude oil than the prior year, this figure has been marginally reduced. Paradoxically, Indian refiners have concurrently sold refined crude goods (petrol and diesel) to countries in the European Union.
Up until recently, the desire to increase energy independence was considered as a method to lessen the significant outflow of foreign currency each year. Along with this, it has become necessary to be less dependent on a number of Middle Eastern “petro-states,” like Saudi Arabia and Qatar. Yet, the adoption of electric vehicles has so far been another important factor in India’s economic decarbonization.
India’s Promise to Become Carbon-Neutral By 2070
There is not much room for manoeuvre after the Prime Minister’s declaration that India will achieve carbon neutrality by 2070 during the COP Conference in Glasgow. After all, during the 20th century, the Western world expanded thanks to cheap and abundant carbon. Similar to China, India now needs to develop economically more than anything else. This means that India has to have sustained growth, as it will be the country most affected by the effects of global warming.
Summertime conditions have already been labelled as “unbearable” and “unlivable” due to high AQI levels. India cannot bear to fall short of its carbon neutrality goals, and the transport industry, whether it be for freight or passengers, will be crucial in this regard, especially as the country switches to electric vehicles.
Of course, there are numerous instances of shared mobility organisations converting to electric vehicles and two-wheelers already. A portion of this shift is being influenced by legislation, such as the Delhi government’s draught aggregator policy, which requires taxi services, food delivery services, and e-commerce businesses to switch to a fully electric fleet by April 1, 2030. If you reside in a large city like Delhi-NCR, Mumbai, or Bengaluru, your food or online order is likely to arrive on an EV. It’s interesting to note that the tremendous financial advantages of EVs over ICE have driven this shift rather than the noble goal of lowering emissions.
China’s Lithium Reserves Power the Shift to EVs
Notwithstanding this, the fact remains that we presently import a sizable share of the parts for each and every EV from outside, mainly China. Between 30 and 50 percent of the price of an EV is made up of battery cells. It is amazing how China’s singular focus on embracing the electric vehicle revolution has enabled them to establish a number of global leaders in the industry, particularly businesses like BYD, that is an end-to-end EV corporation, constructing everything from the battery cells to the finished automobiles and the charging infrastructure.
Due to its large lithium reserves in its north-western provinces and its possession of mining interests in Australia and South America, China’s transition to EVs was made easier. Additionally, China made investments in the capacity for processing and refining raw materials, controlling close to 60% of the world’s processing capacity for crude lithium into battery-grade goods.
Finally, Chinese businesses began to realise that the Lithium Nickel Manganese Cobalt synthesis was unsustainable as a result of rising Nickel prices and the difficulty in obtaining Cobalt. Businesses like BYD made significant progress towards developing the Lithium Ferro-Phosphate (LFP) battery tech. Through time, a less expensive technology that had flaws was also improved.
India’s EV Infrastructure Has to Be Strong
The main lesson India should take up from the lithium discovery is this. It is not sufficient to find a resource. An entire chemical, technical, and manufacturing ecosystem must be built up around it. Indian refiners, for instance, have recently shipped processed crude goods like diesel and petrol to Europe as a consequence of Russian sanctions since India was clever enough to have extra crude refining capacity. But, the development of these assets should not be driven by opportunism; rather, it should be done in order for India to control the entire value chain for EV mobility in the future, and the Jammu lithium find offers us a fantastic opportunity to do just that.
In Hi-Tech City in Hyderabad and Whitefield in Bangalore, India has already made significant progress in creating software solutions including cutting-edge battery management software (BMS) platforms that power electric cars. The country must now establish facilities in electrochemical engineering, where the cells will be designed and produced. This will enable them to create new battery formulations, perhaps using other materials or more environmentally friendly compounds. India should take use of the fact that it already has a sizable automotive sector, which will produce close to four million passenger automobiles in FY2023, to develop the essential elements of the EVs stack there.
The discovery of lithium should therefore not be considered the end-all and be-all but rather the beginning. India cannot afford to lose this once-in-a-lifetime chance, and everyone has a part to play, including the government, educational establishments, major enterprises, and start-up businesses.
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