Market Trends of India Lithium-ion Battery Industry
Portable Segment to Dominate the Market
- Lithium-ion batteries are commonly used in electronic devices like smartphones, laptops, clocks, watches, and remote controls. Sales of consumer electronics are very much dependent on the country's population and disposable income. Over recent years, the increasing disposable income in India has led to rising living standards, driving the demand for consumer electronics.
- As of January 2024, the Indian smartphone market was a significant market after China, reaching 144-145 million shipments in 2023. This development is a significant boost to India's "Make in India" initiative, as government and industry sources revealed mobile phone exports worth USD 5.5 billion during the April-August period of FY 2023-24. This marks a substantial increase compared to the USD 3 billion recorded during the same period in FY22-23. Apple recorded a 34% year-on-year growth during Q3 2023 compared to the same period in 2022,
- In recent years, internet availability at significantly cheaper rates increased smartphone penetration drastically in India. India has much to offer in the smartphone business, with fast and affordable mobile data rates and the world's second-largest population. Most Indians use smartphones to connect to the internet, creating a massive market for several smartphone makers. In the fourth quarter of 2022, approximately 29.60 million smartphone units were supplied across India.
- The advent of 5G technology has ushered in a new era of connectivity, placing additional strain on battery life as users engage in bandwidth-intensive activities. As a result, there is an ongoing race among smartphone makers to integrate lithium-ion battery solutions that can keep pace with the demands of the digital age while meeting stringent safety and regulatory standards. For instance, according to the Ericsson Mobility Report for November 2023, the number of 5G subscribers in India was expected to reach 130 million by the end of 2023, compared to the 10 million recorded at the end of 2022.
- Alongside smartphones, tablets, and laptops, wearable devices constitute a rapidly expanding category, driving demand for lithium-ion batteries. From fitness trackers to smartwatches and wireless earbuds, wearable technology has permeated various aspects of daily life, offering users convenient access to health data, notifications, and entertainment on the go.
- Additionally, the launch of favorable schemes, such as ''Make in India'' and ''Digital India'', is expected to significantly lower the cost of manufacturing consumer electronics, in turn becoming more affordable for the section of the population living in rural areas of the country, where consumer electronics penetration is low.
- Therefore, owing to the above points, the portable segment is expected to dominate the Indian lithium-ion battery market during the forecast period.
Understand The Key Trends Shaping This Market
Download Sample
Declining Cost Of Lithium-ion Batteries Likely to Drive the Market
- Global lithium-ion battery manufacturers are focusing on reducing the cost of Lithium-ion batteries. The price of lithium-ion batteries has declined steeply over the past ten years. In 2023, the price of an average lithium-ion battery was around USD 139 per kWh, a decrease of more than 82% compared to 2013.
- The lithium-ion battery manufacturers in Asia-Pacific, particularly in India and China, have even lower prices than the average prices mentioned in the graph. One of the major causes of lower prices in India is the availability of advanced manufacturing facilities and skilled workforce.
- Additionally, with the rising demand for battery energy storage systems, energy storage systems manufacturers are focused on increasing their capacity across India. For instance, in May 2022, Nexcharge, a joint venture of Indian battery manufacturer Exide Industries Limited and Switzerland's Leclanche SA, commenced production at a lithium-ion battery plant in Gujarat. The plant includes an installed capacity of 1.5 GWh that is expected to deliver batteries for energy storage applications and automobiles.
- However, in 2022, battery prices had slightly increased to USD 161/KWh (a 7% increase compared to 2021). Owing to the increasing average battery pack prices of electric vehicles and energy storage systems, the battery prices declined in 2023 to 139 USD/kWh, a decrease of over 13%. Lithium prices are expected to ease as more extraction and refining capacity comes online, reaching USD 100/kWh by 2026.
- Furthermore, the government of India is also working to help the miners and battery makers expand the domestic production of minerals used for BESS and electric vehicles (EV) applications and counter the Chinese competitors.
- According to the International Energy Agency, in 2023, the Average Lithium-ion Battery Prices for both cell and Pack types reduced to 14.2 % compared to 2021. Additionally, in May 2023, the Geological Survey of India (GSI) discovered lithium reserves on Revant Hill in Degana in Rajasthan's Nagaur district. It is considered that these reserves can fulfill 80% of the country's demand. Such moves are expected to boost the lithium-ion battery market for ESS applications in India.
- Moreover, the sharp and sustained cost reduction and developments may help strengthen lithium-ion as the battery chemistry of choice among all the end-users applications across the country. These factors are expected to drive the Indian lithium-ion battery market during the forecast period.
