Tata's Battery Unit Bets On Homegrown Tech To Make Lithium Cells

Tata Group's battery unit is preparing to manufacture cells using its own technology for the first time, as tighter export curbs from China push the conglomerate towards self-sufficiency, according to a report by Bloomberg.

Agratas Energy Storage Solutions Pvt Ltd, a closely held Tata unit, is setting up a pilot production line for lithium iron phosphate, or LFP, cells at its upcoming battery factory in Sanand, Gujarat, the report said. A team of Indian, South Korean and Chinese engineers will work on refining the manufacturing process and validating the first batch of LFP cells before commercial production begins.

The shift comes after Agratas executives concluded that a technology deal with a Chinese firm was unlikely, given Beijing's restrictions on exporting critical manufacturing know-how, the report said. Other Indian companies, including Reliance Industries Ltd and JSW Group, have also faced difficulties accessing cell manufacturing technology as existing licensing arrangements run into trouble.

Costs Likely To Rise

Developing LFP technology in-house is expected to add to both costs and timelines for Agratas. This is unlike the company's approach for nickel manganese cobalt, or NMC, cells, where it licensed established technology from Japan's Automotive Energy Supply Corp, a unit of Hong Kong-based Envision Energy International Ltd. That partnership allowed Agratas to skip the early development stages for NMC cells, an advantage it does not have while building LFP cells from the ground up.

The Sanand factory will produce both cell types, the report said. Agratas is central to Tata Group's plan to build a domestic battery manufacturing ecosystem, and the company was at one point considered for a separate listing.

Focus On Grid Storage

LFP batteries are generally cheaper than NMC batteries but offer a shorter driving range. They are better suited for stationary storage and are expected to help Agratas enter the grid-scale battery storage market, a segment growing quickly in India as the country pursues its renewable energy targets.

Agratas is also investing more than $400 million in a research and development centre in Bengaluru, which will focus on LFP and lithium manganese iron phosphate battery technologies, the report added.

The Sanand facility is expected to begin producing NMC battery cells by early 2027, while Agratas' factory in Somerset, England, is scheduled to start production around the middle of next year, according to the report. Both facilities will initially supply battery cells to Jaguar Land Rover, the UK-based unit of Tata Motors Passenger Vehicles Ltd, for its upcoming Range Rover Electric SUV.