Investments in cell manufacturing are anticipated to increase to US$9bn in 2030, according to financial service Icra. 

Cells are used in electronics to deliver more power and are necessary for Electric Vehicles to function. As many move from traditional petrol engines to EVs, the need for an efficient  cell supply chain is growing. 

Icra is based in Gurgaon, India, was founded in 1991 and advises Indian investment institutions.

Electric vehicle manufacturing expenses

Icra’s suggestion is based on the projected growth of EVs over the next few years and the fact that batteries are the most expensive part of an Electric Vehicle.

“In EVs, advance chemistry batteries remain the most critical and the costliest component, accounting for almost 35-40% of the vehicle price,” explained said Shamsher Dewan, senior vice president and group Head - Corporate Ratings at Icra. “At present, battery cells are not manufactured in India, and thus most OEMs rely on imports, and manufacturing operations in India are limited to the assembly of battery packs,” Shamsher Dewan, Senior Vice President & Group Head - Corporate Ratings, ICRA, said. “However, to achieve mass scale penetration of EVs and a competitive cost structure, India will need to create its own eco-system of developing battery cells locally.”

Tesla’s new battery manufacturing factory

Tesla recently announced that it will build a new battery manufacturing equipment line in California, at the Fremont Factory, after buying the factory in 2010. This new project is valued at US$1.5m and will help to supply batteries to Electric Vehicles in North America. 

“Tesla does not have a demand problem, we have a production problem,” explained Elon Musk. “We’ve almost always had a very rare exception, it’s always been a production problem. I think that will remain the case.”