This Battery Maker Bets On EV Demand Revival, Plans To Increase Capacity Threefold

Kabra Extrusiontechnik Ltd. plans to increase its battery pack manufacturing capacity by about threefold, undeterred by the drop in demand for electric vehicles after the government capped the incentives on electric two wheelers.

Battrixx, a division of the company that manufactures Lithium-ion based battery packs, plans to expand its annual manufacturing capacity to 2 gigawatts by FY25, according to the Chief Financial Officer Daulat Jain.

The Kolsite Group company makes around 15,000 to 20,000 battery packs a month, which it plans to take to around 60,000 packs by FY25, Jain told BQ Prime. This will include adding additional manufacturing lines for two-wheeler, three-wheeler and high voltage (HV) battery packs, he said. At present, it caters mainly to the electric two-wheelers.

The capacity expansion was announced in December 2021 by investing an additional Rs 101 crore in phased manners by FY25, depending on industry growth and demand scenarios, Jain said. "The funding will be through internal accruals through the issuance of equity warrants."

The lithium-ion battery pack manufacturer expects the demand for electric two-wheelers to improve by FY24-end after a drop following a reduction in FAME subsidies to Rs 10,000 per kwh with a cap of 15% of the vehicle cost compared with Rs 15,000 per kwh and a cap of 40% earlier. Changes in safety standards has also affected demand.

The measures have prolonged the time involved in developing new designs and obtaining approval under new battery safety standards, and a reduction in subsidies has increased the cost burden for consumers, according to Jain. "Overall, EV sales were hit adversely in the last six to nine months." 

However, it was a temporary blip, and original equipment makers and entire supply chain partners are working on various measures to increase operational efficiencies and reduce costs, he said. The demand is expected to return to earlier levels in the coming two to three quarters, Jain said. 

The company's R&D team is working on new battery chemistries and is "open to adapting to new chemistries and the developments that may change the course of mobility in the future, such as hydrogen fuel cells and sodium" Jain said. 

Varos Technology, R&D firm that the company bought last year, is working in these specific areas.