India: Amara Raja targets bulk EV cell production by 2027
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- Domestic lithium-ion cells may carry ~15% premium over imports
- Bulk production targeted at 2 GWh capacity by 2027
India's lithium-ion cell manufacturing ecosystem is gradually evolving, with Amara Raja Energy & Mobility outlining plans to commence bulk production by 2027. However, domestic cells are expected to remain costlier than imports in the near term, with a projected premium of around 15%, reflecting the absence of a fully integrated upstream supply chain spanning raw materials to components.
The company will follow a phased ramp-up, initiating production at a megawatt-hour scale in 2026 to supply qualification samples to domestic OEMs. Its first giga-factory, with a planned capacity of 2 GWh, will subsequently transition to bulk production in 2027, primarily targeting the electric two-wheeler segment. Market participants indicate that meaningful cost efficiencies are unlikely until production scales to 8-10 GWh, supported by localisation of key inputs.
To mitigate demand-side risks, Amara Raja is diversifying into adjacent applications such as power tools and lawn and garden equipment, while also recalibrating its long-term capacity mix toward a balanced 50:50 split between mobility and energy storage systems. The company has committed an investment of INR 10,000 crore through 2032, with potential expansion beyond the initially planned 16 GWh capacity, contingent on raw material access and technology partnerships.
Industry momentum is building, with Tata Group's Agratas also expected to enter the domestic cell manufacturing space within a similar timeframe. However, dependence on imported raw materials and limited domestic processing capabilities may continue to exert cost pressures in the near term, delaying parity with established global supply chains.
