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Mint
24-06-2025
- Automotive
- Mint
India's EV battery dream hits the great price wall of China
New Delhi: India's goal of creating an electric vehicle (EV) battery manufacturing ecosystem is facing a potential headwind: cheap batteries from China. Domestic manufacturers such as Amara Raja Energy Mobility Ltd and Exide Industries Ltd are worried that their own batteries, which are expected to roll out of factories between this fiscal and FY27, won't be able to match the prices of the Chinese. India-made batteries are expected to be 20-30% costlier than their Chinese counterparts due to heavy reliance on imports of raw materials, according to an industry executive working on cell supply chain at an electric two-wheeler company who spoke on condition of anonymity. Plus, analysts believe that a huge overcapacity of EV battery cells in China means aggressive pricing is here to stay. 'I think everybody would have observed that the pricing coming out of China right now is quite aggressive," Vikramadithya Gourineni, executive director for new energy business at Amara Raja Energy, told analysts in an earnings call on 30 May. 'The cell pricing, the energy storage system (ESS) pricing. So definitely, that's been on a downward trend." Also read | Telangana's Vahan gap: Centre eyes direct link for faster EV subsidies To be sure, India currently does not manufacture EV batteries–mostly lithium ion batteries are used in the country. All local EV makers import batteries–three fourths from Chinese companies such as CATL, BYD and EVE. The rest come from South Korean companies (such as LG, Samsung) and Japan (Panasonic). The Union government and private industry are working to change that. As per the Centre's stated targets, the country wants to domestically produce 100GWh of lithium ion batteries by 2030. India's lithium ion battery demand is expected to grow to 127 GWh by FY30 from 15GWh in FY24, per a November 2024 report by CareEdge ratings. However, the Chinese angle has got local battery makers asking for government support. 'Once the domestic manufacturing capacity of cells is in place, the government has to switch the priority to incentivizing local cell manufacturing," Exide Industries managing director and chief executive officer Avik Roy said on a call with analysts on 6 May after announcing the company's Q4 results. 'Otherwise, this industry will never grow in India." Read this | Tata Motors, JLR flag EV supply chain as a separate business risk. They don't name China, but its imprint is all over. Further, Amara Raja's Gourineni said that future investments, too, will depend on 'our confidence in being able to meet these (Chinese) prices". Amara Raja has earmarked more than ₹1,000 crore for investing in its lithium ion battery factory near Hyderabad, which is expected to begin production in FY27. Exide, which has already invested more than ₹1,000 crore so far for a gigafactory near Bengaluru, is also aiming to commercialize the production of lithium-ion cells within the current financial year. Other players who are making their own lithium ion cell gigafactories include Reliance Industries, Ola Electric, Tata's Agratas, andRajesh Exports, among others. Requests to these companies for comment remained unanswered till press time. Up against the Chinese Elara Capital's executive vice-president Jay Kale wrote in a 12 May note that overcapacity in cells in China will put pressure on battery prices in the medium term. 'Most cell makers are expanding capacities by +50%, which is a concern for profitability of the industry. That said, battery prices in China still remain 10-20% below that in the US and Europe," Kale wrote. 'We expect the gap to widen further as China continues to dominate the supply chain and global capacities are still miles away from China's." There are two types of battery chemistries in EV batteries, lithium iron phosphate (LFP) and Nickel Manganese Cobalt (NMC). Industry observers report that they have seen prices go below $50 per kilowatt hour in some cases from the recent average of $55KWh for lithium iron phosphate (LFP) batteries. NMC battery prices are still hovering around $60 KwH. Also read | India plans to offer grants, ease regulatory norms for rare earth processing amid China supply woes Several estimates suggest China controls about 80% of the world's lithium ion battery market. Plus, Chinese players do not have to rely on imports of raw material such as lithium to make the batteries, since it dominates lithium mining and processing globally with a market share of 80%, as per Organisation for Research on China and Asia. On the other hand, India currently doesn't have processing capacity for lithium, which means all the raw material has to be imported, too. In FY24, the country imported close to $3 billion of lithium, according to commerce ministry data. More than three-fourths of that came from China. What should India do? Given the dependence on imports of key raw materials, Harshvardhan Sharma, group head for auto tech and innovation at Nomura Research Institute Consulting & Solutions India, noted that Indian companies should not try to match any tactical pricing play from overseas. 'The focus should be on building a sustainable battery product, something not feasible at the extremely low price levels," Sharma said. 'Over time, we can expect market prices to adjust to more sustainable levels." Vikram Handa, managing director at battery material manufacturer Epsilon Advanced Material agreed that investment decisions in EV batteries is difficult, considering the low pricing and overcapacity of the Chinese. 'Investment into the technology has to be from the perspective of building domestic capacity, like how the US is doing," Handa toldMint. 'They are subsidising and asking players to build the capacity because it is a critical technology." Also read | Toyota Kirloskar Auto Parts becomes first component maker to get Auto PLI, says Ministry of Heavy Industries In 2021, the central government floated the ₹18,100-crore production linked incentive (PLI) scheme for building 50GWh capacity. However, no incentive in the scheme has been disbursed so far to three selected players–Ola Electric, Reliance Industries and Rajesh Exports–as they remain behind their set timelines of production due to various reasons, including sourcing of raw materials. However, Handa believes that India's current subsidy level of $12-13 kilowatt per hour is too low compared to the support by countries like the US, which provide $45 kilowatt per hour. Don't forget rare earths The risk of dependence on China comes at a time when the automobile industry is worried about the restrictions on export of rare earth magnets, which are needed in electric and internal combustion engine vehicles. About 90% of the world's processing capacity of such magnets is with China, which imposed new restrictions on the exports on 4 April. Under the new process, automobile companies are expected to submit applications with certificates that state that the component will not be used in a defence application. Indian battery makers do not have to face restrictions on lithium currently but the prospects of a future restriction on such exports also is raising the urgency of building domestic capacity. And read | Amara Raja's March quarter margin is an irritant. More trouble ahead?
Business Standard
30-05-2025
- Business
- Business Standard
Amara Raja slips after Q4 PAT slides 27% YoY to Rs 167 cr
Amara Raja Energy & Mobility fell 4.62% to Rs 1,042.75 after the company's standalone net profit declined 26.85% to Rs 166.81 crore, while revenue from operations rose 6.33% to Rs 2,973.85 crore in Q4 March 2025 over Q4 March 2024. Profit before tax (PBT) stood at Rs 224.36 crore in Q4 FY25, registering a decline of 26.52% year-on-year and 46.85% quarter-on-quarter. Total expenses rose 10.98% to Rs 2,796.51 crore in Q4 FY25 over Q4 FY24. During the quarter, the cost of materials consumed stood at Rs 1,624.21 crore (up 9.96% YoY), while employee benefits expense was at Rs 180.08 crore (up 10.55% YoY). The company's net profit slipped 46.51%, while net sales fell 6.01% in Q4 March 2025 over Q3 December 2024. For the full year FY25, revenue from operations advanced 10.16% to Rs 12,404.89 crore, while net profit jumped 6.41% to Rs 963.90 crore. Harshavardhana Gourineni, executive director of automotive and industrial, said, Amara Raja Energy and Mobility continues to deliver consistent and responsible growth. In FY25, we witnessed strong performance across all product categories in the automotive segment, with volumes showing a healthy increase. While the telecom segment experienced a decline, this was effectively offset by robust growth in the UPS business within the industrial segment. These efforts will strengthen our competitive position and support our journey toward sustained market leadership. Vikramadithya Gourineni, executive director of new energy business, said, The new energy business continues to maintain strong momentum with a strong focus on infrastructure rollout. This year we have commenced the construction of Giga Factory-1 at our industrial park in Telangana, while the Customer Qualification Plant (CQP) and R&D facility are fast nearing completion. Our pack and charger installations continue delivering us real-world feedback, which has helped us in improving our ability to cater to unique customer needs. Jayadev Galla, chairman and managing director, said, Amara Raja continues to record consistent growth across product segments. While the lead acid business continues to deliver strong results, we are seeing good traction in allied businesses as well. The New Energy Business witnessed the groundbreaking of Giga Factory this year and continues to grow as per our projections. In another few quarters we will have the R&D facility and Customer Qualification Plant (CQP) operational, which will add to our capabilities. The teams are committed to delivering excellence even as the global economic scenario continues to remain uncertain. Meanwhile, the company declared a final dividend of Rs 5.20 per share, taking the total dividend for the year to Rs 10.50. The record date for the final dividend is set as 1 August 2025. Amara Raja Energy & Mobility (formerly known as Amara Raja Batteries) is an energy & mobility enterprise and one of the largest manufacturers of energy storage products for both industrial and automotive applications in the Indian battery industry.
United News of India
29-05-2025
- Automotive
- United News of India
Amara Raja Energy & Mobility's Q4 PBT down to Rs 224 crore
Hyderabad/Tirupati, May 29 (UNI) Amara Raja Energy and Mobility Limited (ARE&M), a comprehensive solutions provider in the Energy & Mobility space, on Thursday reported a lowering in its profit before tax (PBT) to Rs 224 crore for the fourth quarter ended March 31,2024, compared with Rs 305 crore in the corresponding quarter of the previous financial year. The company's revenue from operations during the quarter increased to Rs 2,974 crore against Rs 2,797 crore in the same period in the previous year. For the full year FY25, Profit before Tax slightly increased to Rs 1,299 crore, compared to Rs 1,211 crore while revenue from operation stood at Rs 12,405 crore as against Rs 11,260 crore in FY24, the company said in a release here. The Earnings per Share (EPS) for FY25 was at Rs. 52.66. The company recorded an impressive revenue growth in the last FY, on the back of strong volume growth in both automotive and UPS Applications. The margins are adversely impacted due to surge in alloy prices and power cost due to regulatory changes in solar power settlements and fuel surcharges. Speaking on the results, Harshavardhana Gourineni, Executive Director- Automotive and Industrial, said, 'In FY25, we witnessed strong performance across all product categories in the automotive segment, with volumes showing a healthy increase. While the telecom segment experienced a decline, this was effectively offset by robust growth in the UPS business within the industrial segment". Vikramadithya Gourineni, Executive Director - New Energy Business informed, 'This year we have commenced the construction of Giga Factory-1 at our industrial park in Telangana, while the Customer Qualification Plant (CQP) and R&D facility are fast nearing completion'. Jayadev Galla, Chairman and Managing Director said, 'The New Energy Business witnessed groundbreaking of Giga Factory this year and continues to grow as per our projections. In another few quarters we will have the R&D facility and Customer Qualification Plant (CQP) operational which will add to our capabilities. The teams are committed to deliver excellence even as the global economic scenario continues to remain uncertain.' UNI KNR RN
