Friday, 17 May, 2024
By: Yash Gupte
These reserves are anticipated to be able to supply 80 percent of India's entire lithium needs, which is currently met by imports from China. Image Source: IANS
The discovery of these reserves is fantastic news because they are unquestionably alternatives to the ores that are now being extracted from the soil. By 2030, it is anticipated that India will have 13.92 lakh electric vehicles on the roads.
The Degana municipality of the Nagaur district in Rajasthan has been found to contain sizable lithium reserves, according to representatives of the Rajasthan government and the Geological Survey of India (GSI). The 5.9 million tons of lithium that were recently discovered in Jammu and Kashmir are considered to be greatly outnumbered by these deposits. These reserves are anticipated to be able to supply 80 percent of India's entire lithium needs, which is currently met by imports from China. This discovery is a game-changer for India's electric vehicle (EV) industry because it reduces the nation's reliance on imports from abroad and provides financial advantages. India needs to purchase lithium from abroad to meet its demands, primarily from China. Between 2020 and 2021, India purchased lithium worth Rs 6,000 crore. In the long run, the finding of these lithium reserves will lower India's reliance on imports from abroad and lower costs.
The same Renvat hill of Degana and its surroundings, where tungsten material was once supplied to the nation, has been revealed to contain lithium reserves in Rajasthan. In 1914, on the hill of Renvat in Degana, the British made the discovery of the tungsten ore. During the pre-independence era, the tungsten produced here was utilised to construct First World battle-era British Army battle gear. Following independence, it was also employed in the manufacture of surgical instruments.
Rechargeable batteries for cellphones, computers, and electric vehicles are made of the non-ferrous metal lithium. The discovery of these reserves is fantastic news because they are unquestionably alternatives to the ores that are now being extracted from the soil. By 2030, it is anticipated that India will have 13.92 lakh electric vehicles on the roads. Worldwide, lithium is the lightest and most flexible metal. It is a nonferrous metal and one of the essential elements in EV batteries, converting chemical energy into electrical energy. Lithium is also known as white gold due to its global demand. One ton of lithium is worth around Rs 57.36 lakh in the world market.
The World Bank evaluation projects that by 2050, there will be a 500 percent increase in the demand for lithium metal globally. From this perspective, Rajasthan's massive lithium reserves are tremendously advantageous for the state's economy as well as the overall economy of the nation.
Bolivia has the world’s largest lithium reserves of 21 million tons. Argentina, Chile and America also have large reserves of lithium reserves but despite this China with a lithium reserves of 5.1 million tons continues to maintain a monopoly in the global market. Additionally, China is the source of 53.76 percent of India's total lithium imports. Now, with the discovery of lithium reserves in Kashmir and Rajasthan, India can fulfill its lithium needs and minimise its dependence on China.
According to the information provided to the Lok Sabha by Union Minister of State for Heavy Industries Krishan Pal Gujar, as per e-vahan portal of the Ministry of Road Transport and Highways, there has been an exponential rise in sale and registration of electric vehicles in India. Also, India is emerging as one of the largest markets of electric vehicles due to high demand. The electric vehicle sales in India in the calendar year 2022 has brought cheers to the automobile industry in the country. The electric vehicle (EV) market has shown an impressive growth in the past year. The 10,15,196 EVs sold in CY2022 represent a significant 210 percent year-on-year increase over the 3,27,796 units sold in CY2021. The two and three-wheeler segments, both referred to as the "low-hanging fruits" of the EV industry, were responsible for the majority of the growth. It makes sense that they are the main drivers of EV sales because they are cheaper than the electric passenger cars or commercial vehicle segments.
Source: Ministry of Road Transport and Highways (E-Vahan Portal)
In the Financial Year 2022-23, 11,71,944 units of electric vehicles were sold registering a year-on-year growth of 155 percent as compared to FY2021-22 which recorded a sale of 4,58,746 units of electric vehicles.
Source: Ministry of Road Transport and Highways (E-Vahan Portal)
Two-wheelers, the most affordable EV sub-segment, accounted for 61.5 percent of all EV sales in India with 720,733 units, an increase of 185 percent year over year (FY2021-22: 252,539 units). A total of 399,540 electric three-wheelers, including both passenger- and cargo-transporting models, were sold in FY2022-23, an increase of 47 percent Y-o-Y (FY2021-22: 188,447 units). These vehicles made up 34 percent of all EV sales.
The fact that sales in March 2023 reached a new high of 131,175 units, surpassing the previous best of 121,389 units in November 2022, indicates the strength of the EV brigade. Beginning in the joyous month of October 2022, the move to six-figure revenues every month persisted all the way through March 2023.
The rise in product availability in the market, the high cost of petrol, diesel, and compressed natural gas, as well as state subsidies and incentives provided under FAME II scheme, are all factors that contributed to the domestic EV industry's sales growth in 2022. Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II), is a scheme launched by the Government of India to give a boost to development of Electric Vehicles. The Central Government has allocated a budget of Rs 10,000 crore for the second phase of this scheme. The scheme was launched to achieve the goals of National Electric Mobility Mission Plan (NEMMP). Phase I lasted from 2015 to 2019 and Phase II of FAME was launched in 2019.
Apart from the above mentioned schemes, The Government on September 15, 2021 approved the PLI Scheme for Automotive Sector with a budgetary outlay of Rs. 25,938 crore to support domestic manufacturing of vehicles. Electric vehicles are covered under this PLI scheme. With the popularity of electric vehicles (EVs) increasing in India, imports of lithium and lithium-ion increased by 56 percent year over year in 2022–23 (up to January). With a 5.8 percent share of the world's lithium reserves, India will become the world's seventh-largest producer following the recent discovery of lithium reserves in Jammu and Kashmir and Rajasthan. This will assist India in reducing its reliance on imports for this critical mineral.
Ankit Kedia, Founder & Lead Investor, Capital A said, "Lithium-ion batteries are by far the most efficient, safer, and lightweight battery options for the electric vehicles. This is where the discovery of Lithium reserves in different parts of India augurs very well for Indian EV ecosystem. It is true that the mere discovery of the Lithium reserves isn’t automatically going to change everything as we will need to build processing infrastructure and expertise. This is an area where countries like China and the US are far ahead of us in terms of sophistication and maturing of markets."
Currently, Australia produces 47 percent of the world's lithium, followed by Chile with 30 percent of the production and China with 15 percent. However, 58 percent of the processing of the mineral happens in China, 29 percent in Chile, and 10 percent in Argentina. Though India has discovered large reserves of the strategic mineral but is extremely important for the country to develop technologies and set-ups through which it can manufacture lithium batteries crucial for electric vehicles.
Varun Goenka, CEO & Co-Founder, Chargeup said, "As India discovers significant lithium reserves in Rajasthan, in addition to the previously discovered reserves in Jammu and Kashmir, the country is well positioned to become the 3rd largest market for EVs in the next 4 years. Batteries, being the single largest cost and supplies dominated by China, have been a major obstacle for India's EV industry."
