Panasonic, Indian Oil to storm Indian EV market with battery joint venture

Fan Jen-chih, Taipei; Samuel Howarth, DIGITIMES Asia 0

Credit: AFP

Panasonic making inroads into the automotive battery market.

The reports coincide with the Indian government's decision to aggressively promote Electric Vehicles (EVs). The news has prompted related manufacturers to seek potential partners.

On April 1, Panasonic announced it was in negotiations with Indian Oil on a battery production partnership. It is hoped that a deal can be reached by the summer of 2024.

Panasonic seeks to collaborate with Indian Oil to produce cylindrical batteries for automotive use. Nikkei reported that Panasonic may provide 2170 batteries to meet the demand in India's motorcycle market, however, specifications for batteries used in three-wheelers, cars, and uninterrupted power supply systems have yet to be finalized.

The collaboration will take the shape of a joint venture between Indian Oil and Panasonic's battery subsidiary, Panasonic Energy, in India. The primary negotiation goals include determining the investment ratio and the scale of production facilities, and if negotiations proceed promptly, this will mark the first time Panasonic Energy manufactures lithium-ion batteries in India.

Panasonic said Indian Oil, India's largest petrochemical company, is urgently seeking alternative energy sources to support India's commitment to achieving net-zero carbon emissions nationwide by 2070. Indian Oil is targeting zero carbon emissions by 2046.

The petroleum industry's major users are vehicles and emergency generators. Therefore, collaborating with Panasonic, whose automotive batteries are intended for electric vehicles and uninterrupted power systems, is logical.

Panasonic Energy's plans extend beyond establishing battery production facilities in India. The company aims to develop a green energy supply chain in India, starting from mineral extraction and refining, all the way to battery sales, vehicle manufacturing, and renewable energy grid services.

Indian Oil possesses ample knowledge of mineral resources and organizational capabilities. These advantages are expected to complement Panasonic well.

India's population of approximately 1.4 billion, coupled with its growing GDP which is projected to become the world's third-largest in the near future, underscores the Indian government's proactive push towards developing the electric vehicle industry. Despite the less mature EV supply chain compared to Europe, the US, China, and Japan and geopolitical factors that exclude China's electric vehicle supply chain, Panasonic sees India as a potentially vast market suitable for developing its automotive battery business.

Nikkei reported that motorcycles and three-wheelers account for 70% of India's vehicles. This contrasts with Panasonic Energy's main product, batteries for four-wheeled vehicles like those manufactured by Tesla, a leading U.S. electric vehicle company.

It is believed that partnering with Indian Oil and manufacturers in India's motorcycle market will help Panasonic Energy establish a new flagship product line.