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Supply chain, talent key challenges to setting up cell manufacturing in India for Electric Vehicles

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Talent and supply chain will be the key challenges for companies planning to set up lithium-ion cell manufacturing in India under the government’s Rs 18,100-crore production-linked incentives (PLI) scheme, according to multiple industry executives.

The active materials used in such cells—ones that undergo chemical reactions to store power—require sophisticated manufacturing processes that are cost-competitive only at a large scale. These supply chains have already been set up in other countries, like China and South Korea, and setting the same in India will be challenging unless there was sufficient scale.

Experts said Indian companies wanting to set up lithium-ion cell plants would have to tie-up with overseas companies for technology assistance. Foreign companies setting operations in India are sending Indians overseas to learn from their other facilities.

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