Suzuki brings EV battery plant to Gujarat in tie-up with Denso, Toshiba

Suzuki brings EV battery plant to Gujarat in tie-up with Denso, Toshiba

September 19, 2019
Marcia González

The decision to set up a lithium-ion battery and electrode manufacturing facility appears to be a move to tap the huge potential market in India

Venturing into the production of lithium-ion batteries and electrodes, Japanese automobile major Suzuki Motors has formed a consortium with Japanese automotive component manufacturer Denso and multinational conglomerate Toshiba to set up a manufacturing unit in Gujarat, India. The batteries will be used to power electric vehicles.

Though the investment figures have not been disclosed yet, according to media speculations the companies are likely to invest between INR 30K Cr to INR 50K Cr in phases over eight years. However, the investment might fluctuate with regards to the global demand for electric vehicles.

A state government official has confirmed the report saying that Suzuki will lead the partnership and the investment will be divided in the proportion of 50:40:10 between Suzuki, Toshiba and Denso.

The plant will be set up in Hansalpur in Gujarat and is said to be the biggest lithium-ion battery manufacturing unit in the world. This move is being considered as an attempt to tap into a huge potential market rising due to the EV push in India.

The companies are still in talks about the modalities of the memorandum of understanding (MoU), following which the consortium is expected to sign it. The Prime Minister’s Office (PMO) is reportedly keeping a close watch on the deal.

Electric vehicle battery production and localization of battery technology is a high priority area of the development. At present, nearly all EVs in India are run on imported batteries. These batteries account for nearly 40% of the total cost of the electric car.

With the Indian government’s push to increase EV and its component production in India, the additional cost of imported EV batteries can be avoided. This will make electric vehicles more affordable in India.

As part of the National Mission on Transformative Mobility and Battery Storage, the government plans to set up around 50GwH factories, which can be used to power one million homes and 30,000 electric vehicles. The initiative has been launched to push the transformation from internal combustion engine (ICE) vehicles to electric vehicles.

Under the initiative, the government is also expected to launch a phased manufacturing program to localize production across the EV value chain. The program has already attracted various stakeholders, manufacturers and international players.

Last month, Tesla and China-based Amperex showed interest in coming on board the government’s initiative. The two companies had planned to invest INR 50K Cr to build factories for the production of these batteries. Other stakeholders working on the localization of EV components are Panasonic and Tata Group.

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