Amara Raja bets on standard Li-ion cells, commissions CQP ahead of gigafactory rollout

Amara Raja Energy & Mobility (ARE&M) is taking a measured approach to its entry into lithium-ion cell manufacturing, choosing to first make standard battery cells for electric two-wheelers and energy storage systems instead of customer-specific products for passenger vehicles, executive director Vikram Gourineni told The Economic Times.

ARE&M is one of India's largest manufacturers of energy storage products for industrial and automotive applications. The company announced its foray into lithium-ion cell manufacturing in 2023 as part of a ₹9,500-crore investment to build a 16 GWh gigafactory in Telangana. On Wednesday, it commissioned its Customer Qualification Plant (CQP), a key milestone before large-scale commercial production begins at its first 2 GWh gigafactory next year. The CQP will manufacture battery cells for customer testing and validation before mass production begins.


"We don't want to set up capacity without an order book that's dependent on any single customer," Gourineni said, explaining the company's phased market strategy. The first product from the facility will be a 2170 cylindrical NMC cell for electric two-wheelers, while also catering to drones, aerospace and power tools. The next focus area will be battery cells for commercial, industrial and utility-scale energy storage systems.

ARE&M expects to begin supplying cells from the CQP to original equipment manufacturers (OEMs) for validation by the end of September or mid-October after completing in-house testing. Customer validation, including battery pack integration and vehicle testing, is expected to take about a year before commercial supply agreements are finalised, paving the way for commercial production at its gigafactory.

Passenger vehicle programmes remain part of the company's long-term plans, but Gourineni said they involve longer development cycles as most automakers source cells for global platforms from established overseas suppliers. "We've started some of those conversations, but it was important for us to first get this facility up and running, demonstrate our manufacturing capabilities and then deepen those engagements," he said.

Gourineni said it was too early to estimate when the business would turn profitable, citing uncertainties around import duties, pricing and plant utilisation. He added that localisation of raw materials and economies of scale would help bridge the current 20-25 per cent cost disadvantage Indian-made battery cells face compared with Chinese rivals.

ARE&M's strategy comes as competition in domestic cell manufacturing gathers pace. Tata Group's Agratas is building a gigafactory in Gujarat to cater to Tata Motors and export markets. Exide Industries, through its joint venture with China's SVOLT Energy Technology, is setting up a lithium-ion cell manufacturing plant in Bengaluru, while Ola Electric is ramping up cell manufacturing at its Tamil Nadu facility as it seeks to integrate battery production with its EV business. Together, these investments underscore India's push to build a domestic battery value chain and reduce dependence on imported cells.