Why are Indian firms on a Lithium hunt?

Lithium batteries are the new oil.

The world is looking at a complete transition from conventional engines to the paradigm of electric vehicles and batteries. The developing nation of India is aiming to achieve 30% of this target within the next decade and it is important to know if this is a plausible goal. Does India have the resources crucial to this transformation?

The recent developments

Automotive market research reports affirm that, with great support from the governing body, companies are looking forward to an electric vehicle boom in the near future. As a preparatory measure for this, three state-owned companies, National Aluminium Company Limited, Hindustan Copper Limited and Mineral Exploration Corporation Limited have come together to set up a joint venture.

This joint venture is named Khanji Bidesh India Ltd. abbreviated as KABIL. The firms that are a part of this venture have been mandated to seek Li and Co assets overseas. This process is expected to get underway in the next financial year. The KABIL companies have been thus been given a deadline of fixing all suitable corporate structures and completing the necessary formalities by March 2019.

This model of operation is also open to private mining companies willing to join in. 

What necessitates an overseas acquisition?

Indian government companies are spearheading the Lithium hunt and there are specific reasons why they’re scanning through foreign lands

·       The expansion of the lithium battery market in India would be difficult because there isn’t a plenty of this novel mineral.

·       There needs to be a reduction in dependence on oil imports (although we may then become dependent on Lithium imports that can be sorted out in the initial phase itself)

·       It will help the Indian government stay in touch with foreign countries for further aid through bilateral diplomatic channels

Will the renewed interest in EVs sustain itself?

Market research reports say that recent battery technologies have allowed the mass-production of electric cars and that is why their market is slowly regaining traction. But they’re still not ranked the best when compared to their much cheaper alternatives.

Not only are liquid and gas fuel-run cars cheaper, but they’re also met with the necessary infrastructure. There are fuel stations from place to place. Charging stations need to be constructed as an all-new amenity for the introduction of electric vehicles on road.

However, there are also many benefits of Lithium battery-run vehicles

1)      Unlike the current day cars, where engines are powered by fuel and accessories by battery, in an EV, the batter will serve the requirements of the entire vehicle as one

2)      Lithium-ion batteries are highly capable and can supply a good amount of current with minimal charging.

The challenges include safeguarding the battery in the vehicle. Li is a highly reactive metal and burns spontaneously on exposure to oxygen in the air. This may pose a major threat to the lives of the passengers aboard.

There are top companies now introducing electric prototypes of their vehicles. How the batteries transform themselves in the coming years will be a noteworthy observation. 

China’s next bet, the used car market

What’s a popular trend in most regions of the world, was unknown to China until the 2000s. Automotive market research reports claim that most people were only buying new cars. But China is finally adopting the trend drilling holes in people’s pockets and the ozone layer at a slower rate than earlier.

Used cars are not only economical but also reduce the carbon footprint greatly. All the energy and resources that go into procuring raw materials, the production processes, and the assembly of new cars are saved. This, according to market research data, means that about 35% of the vehicle’s lifetime carbon emissions is saved! Apart from lowering the carbon footprint of the country, what other impacts can this new trend have on the vast land of China?

The country before and after entry into the used car market

There are a plethora of considerable reasons why the Chinese did not favor the used car market. The primary reason being the poor-quality manufacturing. The prototypes were designed to be affordable and not necessarily durable. The prospective second-hand buyers had no ways that could determine the accident history or other necessary specifics of the vehicle in a concrete manner.

Moreover, the local government’s regulations did not allow choice. Cross-province sale of used vehicles was restricted as a way of supporting the indigenous makers and dealers.

Now, the government has begun freeing the population from such rules. People are starting to realize the value of secondhand cars. The sales of used cars in China have only gained pace since the 2010s and are still not at par with most of the world.

An advancement that has aided the thriving of this market is the improvement in production quality. Cars now meet the quality and safety standards and, therefore, last longer than earlier. With the prevailing conditions, a forecast analysis from market research would predict that the used car market will continue to grow while continuing to remain uncompetitive. The US has been among the behemoths of this sector and China, in 2020, despite all the progress, will remain years away from matching up to it.

The used car market has definitely added value to China’s economy. Investors are noticing its growth and have bet billions of money on it already. This creates possibilities for the entry of entrepreneurs next. Many car companies have already begun schemes for second-hand cars.

How will this serve the government’s motives?

The entry of the used car market into China sets up a network in which the government and its citizens can live symbiotically.

The government has stated its will to go completely electric on road in the coming years. The used car market is driving China towards the low-carbon future that its government wishes for while creating no financial loss for it citizens.

Gradually, as an increasing number of clean-tech based cars will be made, traditional engine run vehicles will transition to second and third owners. They will soon be eased out of the system creating no troubles.

The used car market is thus seen to build a promising model for China’s prosperous future.