I had mentioned this last year and this is a logical step. Exide will see significant hit over time. The replacement market for Amaron will be a big hit since Li Ion will last longer and I don’t think these guys can price it at the rate we could get them at MGA center.
However the article seems incorrect on few data points. None of the lead acid batteries sold today are more than 10k for a MARUTI car. The lithium batteries would be used only for shvs models and will need cooling fans for batteries. These issues will prevent it form being used in Swift as it is a value segment rather than premium c segment.
Here is my post where I have expressed my views.
So should we start writing obituaries for (lead) battery makers?
Battery manufacturing as a standalone business may not remain viable business in the long term. Since a battery is a core component in an electric vehicle, OEMs may decide to make it themselves (like Maruti) until the technology matures before outsourcing it. That can take years even decades. Lead battery market will shrink as Li-ion picks up.
I was surprised to see that Amara Raja is not investing heavily in Li-Ion. The word Li-ion appears exactly once in the most recent annual report. They keep saying that Li-ion is for small gadgets like phones and laptops.
Most of high-end EV batteries are already outsourced. One of the largest players in this space is Panasonic. They manufacture mainly for Tesla. Samsung, Sanyo, Johnson controls are all players. There will be others as well. In my opinion, the technology for EV battery will become easily available. What is going to be difficult to replicate on the ground is the distribution that both Exide and ARBL have.
ARBL will get the tech from Jonson Controls and Exide has tied up with Switzerland’s Leclanche SA to form a joint venture for the manufacture of lithium-ion batteries.
A company like MSIL already has a wide service network which sell MARUTI Genuine accessories (MGA). If the price of battery is cheaper and much more reliable, there is no need to procure the part from outside. If say, my tail lamp housing needs to be replaced, 9 out of 10 times I prefer MGA. Battery could become one such product where the margins are so tied up with volumes that the service center can offer better rate (and quality).
Also need to check fate of EV Vehicles currently being produced in India. Also if EV is so popular, why there is so much panic in World market on Increasing Oil price. Mkt always knows the best
Full EV may be far away but the lead acid battery will be replaced eventually when hybrids with ISG are used. Today we have only a few models like Ciaz and Ertiga with ISG. If this is extended to other models , lithium is the best option to handle regenerative braking. That is what MARUTI is planning to do and this will be major drop of oem sales for both exide and Amaron. It may be significant by 2021 when most models will have ISG.
I think all these battery mfgs will have access to technologies. They are debt free,excellent distribution network,good cash reserve. Buying technology is not an issue at all. Also they have tie-ups with best battery mfgs.
It is believed that cost of battery is linked to volumes. So the question is if these guys can capture the remaining 50% of market after MARUTI eats the oem Share. Also remember that mahindra has expressed interest in getting batteries from Suzuki. So the remianing 50% may also be captured partially by Suzuki
ISRO passing on its Li-Ion technology for only Rs. 1 crore.
Intention is for the betterment of industry.
Not sure., how is the practical applicability of this technology., but it has received an overwhelming response from prospective buyers.
Link attached below
I’ve always believed that the Li-Ion threat is something that incumbents can adapt to rather than get disrupted by. Need to do more reading and build a tangible view though, for the time being this news should drive home the point that Amara Raja and Exide have plans to adapt to the new technology and participate in the story if/as it builds critical mass