Currently, EVs account for 35% of the Li-ion battery market share in India. This is set to reach nearly 90% by 2030. In the absence of proper management of retired EV batteries, this will generate massive waste.
A great deal of discussion is underway around India’s efforts to shift towards a clean mobility ecosystem. Most of them are encouraging, especially since the efforts to introduce electric vehicles appear to have paid off. Today, EV penetration has reached 6.9%, according to the EV Dashboard run by Clean Mobility Shift. India has sold more than 12.30 lakh electric vehicles so far in 2023, the second consecutive year when it breached the 10 lakh milestone.
Compare this to five years ago, when India managed to sell only 1.3 lakh EVs. The EV penetration in 2018 was only 0.51%. The gradual rise in the number of EV sales every year is a reason to celebrate, but it is also a time to think about the future, possibly even worry about it. But why?
It’s because of the massive battery waste being generated right now. Much like the rest of the world, India has not been able to develop a dependable reuse-and-recycle strategy for EV batteries so far. Most of the abandoned lead-acid batteries, which are being used by 2- and 3-wheeler EVs today, end up in the unorganised sector, where their tracking and safety concerns for workers and the environment are huge challenges.
Fig 1 shows challenge and gap mapping in the circular economy. Image via WRI India.
Growing Impact of Electric Vehicles in India
Currently, EVs account for 35% of the Li-ion battery market share in India. This is set to reach nearly 90% by 2030, when the country aims to achieve EV penetration of at least 30%. In absence of proper management of retired EV batteries, this increased demand will make India extremely vulnerable to geopolitical developments – much like it is now for oil. There is also a risk of unregulated mining of critical minerals, especially lithium, and increased imports because of the potential rise in demand.
India relies completely on the import of lithium-ion cells. While the government has approved a production-linked incentive (PLI) scheme for manufacturing advanced chemistry cells (ACCs) in the country, promoting reuse of EV batteries in stationary energy storage sectors – such as telecommunications and data centre backup services – can help reduce the demand for new batteries.
Fig 2 shows lithium demand and supply globally. Image via WRI India.
Besides, recycling of batteries would help India deal with end-to-end manufacturing issues such as raw material constraints, waste generation, environmental pollution, and high costs. Recycled critical raw materials will not only improve material efficiency but can also bring tremendous value to a wide range of stakeholders across the automotive and energy sectors.
To establish a circular economy for EV batteries, India needs an enabling policy and a regulatory framework, along with effective collaborations among stakeholders to establish a robust reuse and recycling ecosystem.
Fig 3 shows EV battery recycling frameworks adopted in state policies. Image via WRI India.
There is a huge potential for battery reuse in India as it aims to become carbon neutral by 2070. According to NITI Aayog estimates, new batteries would create a recycling volume of 128 GWh by 2030, of which around 46% will come from EVs. To treat this volume, India’s lithium battery recycling capacity would have to increase about 60 times over the next eight years, from the current level of 2 GWh.
Reuse will extend the usage of retired EV batteries in other applications, and recycling will ensure the local availability of the battery-critical materials and reduce the pressure on raw material mining. This will help reduce the environmental and carbon footprint as well as GHG emissions, enabling India’s promise to become carbon neutral by 2070. Reuse will extend the usage of retired EV batteries in other applications, and recycling will ensure the local availability of the battery-critical materials and reduce the pressure on raw material mining.
Actions for formalising battery reuse
To address this significant challenge of formalising battery reuse and recycling, WRI India and German development agency GIZ hosted a focus group discussion of experts earlier this year. They recommended some actions:
- Effective tracking and tracing: For reuse, Battery Waste Management Rules (BWMR) 2022 is a good start as it establishes reuse as an activity in the circular value chain. However, assessment and decision-making criteria for the retirement of batteries need to be defined. The post-retirement applications for EV batteries need to be clarified. Guidelines for the effective implementation of Extended Producer Responsibility (EPR) at different stages of battery life are also required.
- Tackling heterogeneity: Heterogeneity of battery design may be due to proprietary reasons by OEMs, but if all designs can collectively treat dismantling as an end use, reuse will be encouraged. Battery OEMs should design reuse-and-recycling-friendly battery packs without compromising on their performance and safety. The provision of battery segregation at the source should be implemented.
- Guidelines and stakeholder collaborations: The industry needs robust guidelines to establish and encourage transparency among stakeholders with respect to lifecycle data while ensuring good quality at the cell and pack levels. It needs to work together for safety across the value chain because it is a collaborative responsibility beyond certificates and standards. The implementation of BWMR 2022 can be eased with the help of a single window clearance system, and EPR trading needs to be user-friendly.
- Assessment, testing, and certification ecosystem: The criteria for deciding when to move the EV battery from its first-life to its second-life applications are a critical element. Before entering the market, vehicles should be certified by the Automotive Research Association of India (ARAI) or International Centre for Automotive Technology (ICAT), which includes testing of batteries as well. Refurbished batteries should go through the same stress tests.
- Support for market development: Currently, the bulk of battery waste is handled by the unorganised sector. For safety and efficiency, the development of a robust organised sector in the recycling industry is critical. The government can play an important role in developing the required systems and standards. Instead of thinking of recycling as a cost-centric activity, it should be considered a revenue generator and industry creator.
It is imperative for policymakers to focus on creating a circular economy for EV batteries. Otherwise the cost of creating new ones will be very high as more EVs will mean less availability of critical minerals and increased mining processes, some of them unregulated.
