Tata Motors said the cost of battery cells had boosted by about 20% because due to a global increase in raw material prices, largely lithium, putting pressure on the automaker in the short term.
Tata is India’s top-selling electric automaker.
Shailesh Chandra, managing director of the passenger vehicles and electric mobility subsidiaries, said that cell prices have been increasing over months and he expects them to be high for about a year.
“Immediate impact seems to be about a 20% kind of a boost which will have short-term pressure. This should moderate under a year and then start coming down,” Chandra said.
The automaker has over 90% share of India’s electric car market, and it expects sales of its electric cars to increase over four-fold this fiscal year from 4,200 units in 2021.
The EV maker sources lithium-ion batteries for its automobiles from Tata AutoComp Systems which has a joint venture with China’s Guoxuan Hi-Tech to produce them regionally.
Chandra said as battery recycling gains speed there will be access to raw materials beyond mines and it will offset some of the cost pressures.
“Short-term spikes will happen. It is good to focus on the secular long-term trend which will keep going down,” Chandra added.
