In the concern for the environment, the auto sector & energy sector are focusing on their new wing i.e. change towards a better approach of Electric Vehicles(EV's) and renewable energy. But the challenges lie in the lack of development of infrastructure. And India being the largest nation in the consumption sector doesn't want to miss the train.
Given the government's active focus on these sectors itself speaks many growth opportunities to those who hear it. And being an Investor I too have a place for these sectors in my portfolio.
The real question is what drives the opportunity?
ACC battery manufacturing represents one of the largest economic opportunities in the 21st century for several global growth sectors such as consumer electronics, electric vehicles, and renewable energy.
* The PLI Scheme:
The PLI scheme for ACC battery is likely to incentivize large domestic and international players in establishing a competitive battery setup in the country. The scheme’s battery policy aims to make manufacturers globally competitive, boost exports, achieve economies of scale, and build cutting-edge products.
Govt. making a significant effort to bring EV's out on the road but it has faced headwinds due to lack of proper infrastructure and high battery costs which is approx. 50% of an EV's cost. While in the case of Renewable Energy it requires huge energy storage facilities.
Under PLI Scheme, the total outlay for the ACC sector is Rs 18,100 cr. As per a statement released by the Union Cabinet, the scheme is expected to lead production and exports worth Rs. 326,000 crore (US$ 45,048 million) and Rs. 245,000 crore, respectively, in the next four years. Also, it is likely to bring additional investments of Rs. 2,700 crore, earn direct and indirect revenue of Rs. 15,760 crore and create 180,000 jobs in four years.
Recent Development by corporates:
* Tata Chemicals has established a circular economy in its lithium-ion battery business. By recycling Li-ion batteries. InsperiCo is the world's first branded recycled cobalt. Recycling of spent batteries gives us valuable metals in the form of salts of lithium, cobalt, nickel, and manganese along with by-products like graphite, iron, copper, and aluminum.
*Producing industry-leading levels of yield with a 99 percent purity level of the recovered metal
Source: Company, Tata Chemicals Ltd.
*FEMA 2: Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, Phase 2
*PLI Scheme: Production Linked Incentive Scheme.
Hoping you may also save a place for ACC Sector in your portfolio.
Until next time,
The Humane Opportunist.