Insights

Exide Ready to Shake EV Battery Packs

21 December 2021 • Parikshit Singh

While the transition of electric mobility is in a fast lane, Exide Industries’ announcement to set up a greenfield multi-gigawatt Li-ion cell manufacturing facility in India comes as a light at the end of the tunnel for the company.

Until now, investors had raised concerns about the company’s plan in lithium-ion batteries which are replacing the traditional lead batteries in electric vehicles (EV). Exide is the largest battery manufacturer in the lead-acid battery markets, commanding a market share close to 55% in the organized market. Being the biggest player in the market, the company was not participating in the prevailing trend for EVs as expected. Over the past 5 years, Exide Industries fell 8% whereas Nifty 50 and Nifty Auto have given returns of nearly 111% and 17% respectively. However, after the company’s announcement today, the stock has jumped 6% as it is adapting to the changing technologies demanded by the sector. It has now become more of a necessity for the company to be future-ready. 

Exide also plans to apply for and participate in the Production-Linked Incentive Scheme for National Programme on Advanced Chemistry Cell battery Storage, issued by the Ministry of Heavy Industries. With the evaluation of the next steps, the company shall be sharing more details on the above as it further develops its plans.

Commenting on the new development — Mr Subir Chakraborty, MD & CEO, said “Electric Vehicle penetration in India is expected to become a reality in the near future. The Government is pushing electric vehicle manufacturing through a supportive policy framework and by providing incentives to the manufacturers in this space. As a result, Lithium-ion battery-based storage solutions will gain prominence, for both Automotive and Industrial applications.

Exide has been a frontrunner in the adoption of new technologies and has consistently evolved its manufacturing processes to provide the latest products and solutions to its customers. The company has already set up a state-of-the-art factory (in JV with Leclanche SA, Switzerland) which is equipped with fully automated lithium-ion assembly lines for battery packs and modules. The factory has already started production and shall be offering energy solutions that are scalable and eco-friendly.

We have now planned to set up a multi-gigawatt lithium-ion cell manufacturing plant and to participate in the Production-Linked Incentive Scheme for Advanced Chemistry Cell manufacturing as proposed by the Government of India. Cell manufacturing is an integral part of the Lithium-ion battery manufacturing chain, and we believe that the setting up of this plant will enable us to be more cost-competitive and better serve our esteemed customers.’’

Challenges ahead

The company needs to invest heavily into the Li-ion battery packs in the future, which will require huge Capex plans and to be feasible, the battery material requires massive industrial-scale production capacity, which India will take time to develop. Moreover, the dependence on raw material imports will drive up costs for the company. It remains to be seen how successful they will be to pass on the costs.

While the roadmap is yet to be released, it is exciting to see when Exide will actually commercialize its operations for Li-ion batteries and start supplying to the OEMs. Hence, the next few years are very crucial for the company.

Source: Exchange Filing, Economic Times

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