Amara Raja Plans Major Expansion in EV Battery Manufacturing

Key Highlights:

Amara Raja seeks external funding for its Rs 9,500 crore gigafactory project in Telangana.
The company plans to reach a 16 GWH manufacturing capacity by 2029.
Phase 1 of a 1.5 GWH battery pack facility has been launched in Mahabubnagar.
Equity funding will be required to expand beyond 8-10 GWH capacity.

Amara Raja to Expand EV Battery Manufacturing

Amara Raja Energy & Mobility (ARE&M) has announced plans to expand its electric vehicle (EV) battery manufacturing operations. The company is seeking external funding options, including debt, equity, or a combination of both, to support its ambitious growth plans.

Gigafactory Corridor in Telangana

The company aims to allocate Rs 9,500 crore to establish a gigafactory corridor in Telangana. This project will be a major step forward in Amara Raja’s efforts to become a leading player in the EV battery market.

Current Funding and Expansion Plans

At present, ARE&M is funded through sales of its products through ARACT and from internally generated cash flows. ARACT, a company established in 2021, is engaged in the production of battery packs, fixed chargers, and individual cells designed for use in electric vehicles. In December 2022, Amara Raja launched a 16 GWH lithium-ion cell manufacturing plant and battery pack assembly plant in Telangana.

Phase 1 Launch and Future Plans

This week, Amara Raja launched Phase 1 of its 1.5 GWH battery pack facility in Mahabubnagar district. The company also staged a groundbreaking ceremony on its Customer Qualification facility for cell production. Jayadev Galla, the Chairman and Managing Director, said that the company wants to attain 16 GWH of cell manufacturing by 2029, with variable additions depending on the market.

Exploring Funding Options

Galla mentioned that internal accruals and borrowings will cover the initial phase of manufacturing. However, equity funding will be required for further expansion. The company may consider stake dilution after reaching 50% of the intended production. The exact amount to be raised or the level of stake dilution has not yet been disclosed

Also Read: Tata Nexon EV Discounts Up to Rs 2.05 Lakh in August

ELCTRIK Speaks

Amara Raja’s expansion into EV battery manufacturing underscores its commitment to becoming a key player in the electric vehicle industry. With ambitious plans for a gigafactory in Telangana and the exploration of various funding options, the company is well-positioned to meet the growing demand for EV batteries in the coming years.