As it continues to place a high priority on research and development as well as the production of lithium-ion (Li-ion) cells, Amara Raja Energy & Mobility Ltd plans to invest more than Rs 1,000 crore in its New Energy Business during the fiscal year 2026.
At an estimated cost of Rs 9,500 crore, India’s largest lead acid battery manufacturer is building a Gigafactory in Telangana to create Li-ion batteries through its New Energy Business unit in response to the growing demand for these batteries.
In a post-earnings call, Amara Raja CFO Delli Babu informed investors that the total investment in the Li-ion cell business by the end of this fiscal year will be approximately Rs 1,200 crore, with an additional investment of at least Rs 1,000 crore in the following fiscal year, contingent on equipment payments.
Over the following ten years, the Gigafactory is anticipated to have a capacity of 5 GWh battery packs and 16 GWh Li-ion cells. With a 1.5 GWh capacity, the battery pack plant’s first phase was just opened.
By the end of 2026, the Gigafactory will begin producing commercially cells based on Nickel Manganese Cobalt (NMC) chemistry, primarily for two-wheelers. The business is also considering an initial capacity of 4-6 GWh for the production of cells based on lithium iron phosphate (LFP) chemistry.
Despite the popularity of Li-ion cells based on NMC and LFP in the electric car sector, LFP cells are favored worldwide due to their lower costs, longer life cycle, and thermal stability. New ideas and technologies are being developed to solve the problems of the relatively lower density of LFP batteries.
According to the management, LFP will account for roughly 75–80% of the market’s total needs in the future, with NMC making up a smaller share. This will also be reflected in the company’s capacity allocation at the Gigafactory.
In addition to working with a Chinese business to jointly create a 2170 cylindrical cell based on NMC, Amara Raja has worked with Gotion-InoBat-Batteries to produce Li-ion cells based on LFP.
Additionally, the business recently partnered with manufacturers Piaggio India and Ather Energy to offer Li-ion batteries.
At the moment, the business uses its internal accruals, or own-generated profits, to finance its investments. Later on, though, the management may look at borrowing money or selling shares to raise more money.
Exide Industries, a rival of Amara Raja, is also anticipated to invest approximately Rs 1,000 crore this fiscal year for the production of Li-ion cells and battery pack solutions. With an initial capacity of 6 GWh, Exide’s Li-ion Gigafactory is anticipated to begin operations in its first phase next year.
