The world's leading chemical company LG Chemical has postponed the electric vehicle lithium ion battery project in India. The reason is that much is not clear in the battery storage policy announced by the NITI Aayog. Due to this, the manufacture of electric vehicles in India may get a setback.
Lg Chemical, L.G. Polymers has a parent company. Lg Recently 12 people died in Visakhapatnam due to gas leaks at the Polymers plant.
LG Polymers is among the world's leading battery companies
Explain that due to Covid-19, the auto sector is currently in recession. It was believed that India's electric vehicle industry would prove to be a boon for the sector in future. But L.G. Chemical's decision has kept this entire future in darkness. Significantly, L.G. Chemicals is one of the world's leading lithium ion battery manufacturing companies.
A partnership was formed with Mahindra Group
In early 2018, Mahindra & Mahindra, one of India's large industrial houses, announced a partnership with it to produce lithium-ion batteries for the electric vehicle project. However, it was later decided to expand the scope of the project to supply batteries to other auto companies like Hyundai and Reno. Later, Mahindra, Hyundai and Reno formed a consortium with L.G. It was decided to give business to Chemicals. It was also planned to join the project as an equity partner.
Estimated investment of $ 500 million
Lg Chemical had set a target to complete the lithium-ion battery demand for electric vehicles in India in the first phase itself. This made planning for investment easy. Production was planned to start in the last quarter of 2019-20 with an estimated investment of $ 500 million.
Lack of clarity in battery storage policy
According to analysts, due to ambiguity about the announcement of the battery storage policy by the NITI Aayog, L.G. Chemical adopted a wait-and-seek policy. Due to the delay, the company has decided to postpone the project. There was no clarity in the storage policy on matters such as battery incentives, increase in localization and fall in import tariffs. According to Siam, an organization in the auto sector, there is no clarity about these guidelines even after three years.
EV market will grow at 30 percent
According to the report published by India Energy Storage Alliance, the electrical vehicle market is expected to grow at a rate of 30 percent. By 2026, an increase of 28 GW will be seen. As part of the participation in 2018, L.G. Chemical was supposed to supply lithium ion to Mahindra for the electric vehicle. Mahesh Babu, CEO of Mahindra Electric, says that the project has been discussed many times, but there is no information about when the project will start.