In the stiffening fight against Climate Change, Electric Vehicles (EVs) have emerged as the best alternative to Internal Combustion Engines (ICE) to reduce the mobility-based emissions. Within the mobility segment, commercial vehicles account 2/3rd of total emissions thus presenting a massive opportunity for EV technologies to curb the emissions. On an average, assuming an annual runtime of > 40,000 km, a 2W EV can help bring down the absolute annual emissions by 2 tonnes, a 3W EV by 5 tonnes, and a 4W EV by 7.3 tonnes should the electric vehicles be powered through renewable sources.
India holds the world’s largest 2-/3-W commercial vehicle population and has been witnessing a substantial growth in the last mile delivery sector. In FY’23, 2W and 3W commercial vehicles saw 4% & 33% EV adoption, respectively while sales in the light-medium-heavy trucks & buses segments are yet to see substantial growth given higher TCO over their respective ICE counterparts. TCO plays a crucial role in determining the adoption rate of a commercial EV and the high cost of acquisition proves to be a major factor. While the battery pack accounts for ~40-50% of total EV costs, cells account for ~60% of pack costs. In addition to the cost, commercial EV applications call for utmost reliability and performance in addition to safety which is always non-negotiable. Therefore, battery cell chemistry is one of the key attributes when determining the ideal battery pack for any EV commercial vehicle application.
Different cell chemistries powering Indian Commercial EV batteries
The prominent cell chemistries powering Indian commercial EVs include Nickel Manganese Cobalt (NMC), Lithium Iron Phosphate (LFP), and Lithium Titanate (LTO). While each of these chemistries have shown promise, OEMs need to evaluate various parameters depending on application type while selecting the preferred cell chemistry route. The electrochemical reaction hub or the battery cell typically consists of active materials (cathode and anode), electrolyte, and separator, where in cathode drives most of the cell costs, up to 60% which is also a critical parameter of identifying the appropriate chemistry.
In the case of NMC- graphite cells; Li, Ni, Mn, & Co are ~20-25% by weight and could lead to potential supply chain barriers, especially for India which lacks reserves in these metals and is also the cause for the higher impact on the cost. NMC has the highest energy density amongst the three chemistries, which translates to maximum distance covered per charge, but at high temperatures (>70-80 °C) it undergoes parasitic reaction which leads to thermal runaway (safety risks), especially at a higher charge/discharge rate operation. The cycle life of a typical NMC battery is ~1500 charge-discharge, owing to which NMC chemistry is not the most preferred chemistry for batteries in the Indian EV mobility sector.
LFP cells show resilience at higher temperatures even at fast charging/discharging rates, which make them suitable for tropical climate regions such as India & other South-East Asian (SEA) countries. Moreover, LFP cathode active material constitutes of Li, Fe & P (Ni and Co free) which is not at the state of vulnerability in terms of commodity price fluctuations and supply chain constraints. LFP offers a typical cycle life of ~2000-3000 charge-discharge cycles & has moderate energy density. Because of these properties, LFP batteries lie in between ranges of the other two prominent chemistries, NMC and LTO. Thus, LFP can offer TCO benefits, good allowable range, and associated useful life making it a much favourable chemistry.
LTO cells use zero strain active nanomaterials instead of graphite as an anode and coupled with high voltage cathodes, thus, offering extreme fast charging capabilities, up to 10C rates, along with high thermal stability and low risks of fire even without sophisticated thermal management systems. The cycle life is typically ~15,000 charge-discharge cycles but has the least energy density among all prominent chemistries and hence, cost up to 2x of NMC and LFP (per kWh basis). However, the fast-charging ability helps increase the uptime, thus bringing down the overall TCO of the vehicle.
In addition to the cell chemistry selection, Indian OEMs are also looking at critical parameters like supply chain strategies, ease of scalability and scope of indigenisation as well. Sustainable and judicial selection models are mandatory on understanding the facts such as expensive raw materials (Li, Co, Ni salts), demand-driven markets & geopolitical tensions could hamper the business growth. The aforementioned macro-economic factors prove to be decisive for any OEM while choosing the right chemistry over and above the performance driven parameters.
Future of the Indian CEV market
All the major global analyst firms expect NMC & LFP to retain a high global market share (~95%) till 2030 because of its availability at GWh scale, faster adoption and the maturity of technology and its auxiliaries’ resources, leading to quicker technology integration with various EV platforms and hence faster route to market. Meanwhile, other chemistries like Na-ion, solid-state, etc are estimated to grow to <5% of total global share by end of the decade due to the lack of chemistry know-how, scalability-issues & their commercial viability.
The Indian commercial-EV market is showing promising growth signs as technological breakthroughs & increased EV penetration would assist in bringing down the materials & manufacturing costs to achieve GoI’s 2030 target of 70% commercial-EV penetration. Many companies are focusing on indigenization of cell manufacturing which will lead to cost reduction & decrease external supply chain pressures.
To summarise, no single battery chemistry solution fits all market needs. Selection of a cell chemistry is not done solely based on a technical parameter but other aspects such as safety, TCO, and supply chain constraints as well. Cell chemistries such as LFP, LTO and NMC would cater the market based on the application segments. While NMC has the highest range offering, given its challenges on the supply chain and thermal instability, leading manufacturers are likely to prefer LFP batteries for long-haul applications while the short haul last mile logistics could be catered to by the LTO batteries.