Suzuki Motor Corporation, Denso Corporation and Toshiba Corporation will set up a joint venture company for the production of automotive lithium-ion battery packs in India. Suzuki will hold 50 percent stake in the joint venture company, Toshiba and Denso will own 40 percent & 10 percent respectively.
The joint venture company will be established this year and will start manufacture soon afterward. The three companies said in a joint statement that an initial investment of 20 billion Japanese yen (nearly Rs 1,200 Crore) will be made in this joint venture.
"In the automotive market of India where fuel cars are the mainstream models, introduction of sustainable technology suitable for such affordable cars is required. The battery pack manufacturing joint venture by the three companies will realize stable supply of lithium-ion battery packs in India in the course of promoting sustainable cars in the country and will contribute to “Make in India” initiative by the Indian Government," statement issued by Suzuki Motor Corporation in Japan stated.
Majority of the batteries in India are imported from China as the manufacturing of these batteries in India is limited due to lack of technology. The joint venture company will make lithium ion automotive batteries in India to boost electric vehicles in India, a sector that has hardly been established because of high development costs. At present, lithium-ion batteries account for 50% of the cost of an electric vehicle, making them costly as compared with usual cars.
The sale of electric vehicles in India is likely to reach 6.7 million by FY20 from 22,000 units in FY16 and the demand for lithium ion batteries will keep on increasing over the next five years in the country.
This tie-up will be a big boost to the Indian automotive market as a lot of companies are considering of manufacturing electric vehicles. EVs can successfully replace the number of fuel cars on the roads and it is not hard to imagine a time when such vehicles will start dominating the roads.
April 21, 2017