Exide Industries looks to set up Tesla-style gigafactory

The country’s largest automotive battery maker, Exide Industries, will look to set up a Tesla-style gigafactory using the production-linked incentive (PLI) scheme while it ramps-up focus on lithium-ion batteries.

The company is expected to finalise details of its advanced chemistry cell battery making facility once the PLI PLI related to the segment is announced.

India’s second largest battery manufacturer, Amara Raja Group, has also announced their intention to invest into ACC battery making depending on the PLI scheme nitty-gritty.

PLI scheme

The Cabinet had in May approved a PLI scheme with an outlay of ₹18,000 crore to promote manufacturing, export and storage of lithium-ion cells, essential for developing electric vehicles.

Also read: Exide Industries broadens its doorstep service facility

According to Subir Chakraborty, MD and CEO, Exide Industries, ACC battery-making is a capex intensive segment and the PLI scheme “will act as a sweetner”. However, a final call on the foray will depend on the “long-term prospects of the investments”.

“We are interested in the gigafactory and investments will be made depending on the long-term prospects. However, the details of the PLI scheme are something that we are awaiting at the moment. We are a cash-rich company and we are not ruling out anything at the moment,” he said post the company’s AGM.

Typically, investments for setting up one gigawatt per hour (1000 megawatt per hour) of battery capacity is to the tune of ₹700 crore ($100 million) and it is sufficient to power one million homes for an hour and around 30,000 electric cars.

Chakraborty added that Exide has “not frozen” its investment details, but added that a one GWh capacity would be “too small” to ensure a “significant scale” in the lithium-ion space.

Lithium-ion assembly facility

Exide is also planning to bring its lithium-ion battery assembly factory in Gujarat by this fiscal-end. Plans to bring the facility on-stream were delayed by a year because of the pandemic.

“Things like delivery of plant and machinery lines and bringing in of engineers were delayed first the national lockdown last year and then due to the second wave of Covid infections,” Chakraborty said.

The company already has a tie-up with 100-odd OEMs and different prototypes and testing are being carried out already. “We are expecting the products to hit the markets around this fiscal,” he added.

The JV with Switzerland-based Leclanche SA is the first such for the company as it looks at tapping the EV and energy storage segments.

Derisking

According to Chakraborty, the company is exploring de-risking as it looks to tap export markets and “build deeper presence” across the existing 50 markets that cover West Asia, Europe, SE Asia and the US. Focus on the industrial segment – with exclusive tie-ups – is also being explored across international markets.

“While there is still huge potential for lead acid batteries, the company plans to step up exports. Moreover, OEMs in India and overseas are also looking at hybrid battery models where we now have a presence,” he said.

Currently, exports account for about 7-8per cent of the nearly $1-billion of the company’s turnover.

In India, around 5.5 per cent price hikes were made in the automotive battery segment (lead acid battery) in FY21; while another 4 per cent has been made in phases already this year. Price hikes have been linked to lead price movements.

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