Amara Raja explores new partnership in lithium-ion cell manufacturing

Amara Raja, the Indian battery maker, is actively exploring a new partnership to enhance its capabilities in lithium-ion cell manufacturing with a focus on areas such as cell technology, supply chain, and manufacturing know-how, with its large-scale, giga factory coming up. 

“We are in the advancement stage of discussion with various players for a more comprehensive cell partnership, looking at technology, manufacturing know-how, and supply chain,” Amara Raja’s Executive Director for New Energy Business Vikramadithya Gourineni told investors in a post-earnings call recently.

Amara Raja is setting up a giga factory for manufacturing lithium-ion cells and battery manufacturing in Telangana that will have a capacity of 16 GWh cell capacity and 5 GWh battery pack capacity over the next 10 years. The company plans to start commercial operations of the first phase of the factory with a capacity of 2 GWh by the end of 2025-26.

The battery maker already tied up with a Chinese company and has jointly developed a Nickel Manganese Cobalt (NMC)--based 2170 cylindrical cell. The giga factory will initially start commercial production with NMC cells, while it will consider other cell chemistries such as Lithium Iron Phosphate (LFP) down the line. These NMC cells will be mainly for the two-wheeler market.

The management did not disclose the name of the company it has partnered with. “As far as NMC cells are concerned, they are reliable suppliers based in China, having a presence in additional geographies,” Chief Financial Officer Delli Babu said.

Amara Raja is eyeing a new partnership for a larger portfolio of cells across chemistries which can help cater to a larger part of the market. The company expects this collaboration to help gain access to more complex parts of markets like high-voltage battery packs for electric mobility and established supply chains at competitive rates as well as know-how on factory design and get more customer credibility.

Though the company is open to different modes of participation such as equity participation or joint venture from prospective partners across the globe, Gourineni noted that a technology licensing arrangement is the most likely scenario for the time being.