PM Narendra Modi at the headquarters of Tesla Motors
PM Narendra Modi with Elon Musk, CEO of Tesla Motorsfacebook.com/PMOIndia

Imports of Lithium are crucial for US-based electric car manufacturer Tesla Motors' chief executive Elon Musk's plan to set up a Gigafactory in India, as the country does not have enough reserves of the rare metal to support making of lithium-ion batteries, according to analysts.

Lithium is a rare metal used in manufacturing of batteries to increase their capacity and also helpful in reducing the size of battery boxes compared to other battery technologies.

"From a manufacturing-in-India perspective, the country doesn't have any Lithium deposits, so it is going to be hard. Unless we import Lithium ore, which is available in Bolivia, Argentina and Australia, manufacturing cannot be supported in India," Business Standard quoted Mridula Dixit, principal research scientist, Centre for Study of Science, Technology and Policy (CSTEP), as saying.

However, Australia could become a major source for imports of Lithium ore, as the trade ties between the two nations have improved in the past. India has entered into an agreement with Australia for Uranium supply to its nuclear reactors.

"We are not well-placed in terms of raw materials. The supply chain needs to be worked out. Also, making the batteries requires a very controlled environment," said Dixit, who has extensive exposure to lithium-ion technologies.

"Given India's lack of expertise, I see global manufacturers bringing in their technology and manufacturing processes first, in the next five to 10 years; only after that would we be able to have local players gaining expertise and beginning to manufacture in India" Dixit added.

Musk, the founder of Tesla Motors, has recently hinted at setting up a Gigafactory in India to manufacture lithium-ion batteries, taking into the problem of power shortage in the rural areas of the country, which holds a huge potential for such batteries.

During his visit to the US in September, Prime Minister Narendra Modi had held discussions with Musk at the Tesla campus in Silicon Valley on the potential of having a battery making facility and other renewable energy technologies in India.

Tarun Mehta, co-founder of Ather Energy, an electric vehicle start-up, sees the necessity to have  hundreds of Gigafactories in the country, as lithium-ion batteries can "compete with lead acid batteries in cost."

"One Gigafactory can produce just enough cells for half a million Tesla cars. Globally, we produce 65 million cars and a lot more two-wheelers. If all of them were to go electric over the next decade or two, you are looking at 100-plus Gigafactories at least," said Mehta.

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