Tech independence important for a secure supply chain

Amidst all the battery cell manufacturing excitement, one company has taken a small but sure step towards making it a reality - Log9 Materials, a material science startup, is striding towards Make-in-India with indigenously developed RapidX fast charging battery technology and the country's first cell manufacturing facility.

Log9 Materials was set up in 2015 and was founded by Dr. Akshay Singhal, Kartik Hajela, and Pankaj Sharma. At the India Energy Storage Week 2022 held in May - the company won the IESA Excellence awards for Startup company of the year (EV) and Technology Innovation of the year (ES). 

Following is an interesting chat with Pankaj Sharma - Co-founding Advisor at Log9, where he spoke about how we need to be creators of new technology and not just responders to what has been done in the western world, whether it is tech or demand.

Tell us about your fast charging battery tech, and what else exciting is happening at Log9?

Log9 RapidX battery technology for two-wheelers and three-wheelers is one of our major products. A battery that will charge faster than a mobile phone is poised to remove the biggest bottleneck for adoption, which is the long waiting time to charge EVs.

I think what people are looking for is 'mann ki shanti' (peace of mind), literally. In terms of technology, when customers are looking to invest in an electric vehicle, they are asking for power, performance, and peace of mind, and that's what we are planning to provide through our technology. We are creating technology that is not going to leave the users high and dry; a battery tech that is going to power up the electric vehicles, not for 2-3 years but for 10 years.

We are super excited about the technology that we are creating with over 400 stellar team members that we have at Log9. We have created India's 1^st commercial-ready Li-ion cell technology, and are setting up a 50MWh cell manufacturing line within India. It gives us a sense of self-reliance that we all wanted. We need to create innovation grounds-up. I think our time has arrived when we can create base technologies on which we can build this nation.

An indigenised Li-ion cell is India's opportunity to leapfrog into the independence of technology. When the world starts to import things from you, when you can create something in which you are not dependent on foreign export or materials, you have the most exciting thing happening here itself.

It is being discussed that the battery materials supply chain is at least 3-4 years starting late… do you think it will be able to catch up to the demands of the giga-scale manufacturing?  

The question is, not where can we source essential materials from, but can we develop technologies that have minimum dependencies on imported rare earth material? The idea is to develop technologies in India that are more suited for the material that you can source within this country. If you look carefully, the majority of the material that goes into a typical Li-ion cell can come from within India, except for a few elements such as Lithium. Where India lags is battery-grade finished materials and not the raw form of materials.

What India needs to do is to fire up its battery-grade finished material industry. Once we start to produce our electrolyte, separators, aluminum, copper, etc., we will have the opportunity to reach larger self-reliance in our Li-ion material supply chain and leapfrog on the lost time.

Li-ion cells are already becoming the most sought-after component in the world. On the other hand, the raw material supply chain is still something you can fix, there is enough raw material supply in the market that you can secure for the next 10 years, but it is very difficult to secure cell supply for the next 10 years.

It is a complex problem, nobody has a supply chain fully fixed up; the idea is you build your chemistry that has the least dependency on complex and rare earth materials, and for the other things you fire up your local engines. While the EV revolution has to happen, India has to go through a materials science revolution. We are the 2^nd largest producer of Al in the world, but we still don't have a square inch of battery grade, Al, in the country, and you wonder why? If I'm making a cell, why do I have to import Al, when we make tons of it – it's because we don't have materials science established here. Another industry has to kick start parallelly - the material science industry - which is metals and electrolytes and other materials. We can within this country fix about 80 percent of the resource, and for the remaining 20 percent, which is lithium or cobalt, you can secure a supply side.

Also, we as a country need to get our Li-ion recycling process in shape, so that we can secure our lithium supply through recycling technologies. Just imagine the amount of lithium that is coming into India through imported cells, that's like creating a mine of your own if you can mine it. At Log9, Akshay and Kartik have invested their capital in a company that is focused on building the tech for lithium recycling.

As a manufacturer for you to commit materials offtake of a certain tonnage, you need to be sure you are going to be using that material?

Hence you must grow the cell chemistry in-house, then you know what you need or don't need. A lot of people in India are still struggling with setting up cell manufacturing. Some go to the US or Europe and then licence the tech or chemistry from them (and hope that they have been given everything); it gives you the ratios of the material you need to make a cell, which is fine, but if you are not growing cell technology grounds up then you'll just be a 'point-in-time' success.

You can probably create a Li-ion cell that can run a two-wheeler today, but the market will demand a better cell, cheaper cell, energy-dense cell, different form factor cell maybe… you need to have that level of ability or fungibility in your cell technology, so that you can respond to what the market demands. Hence home-grown technology is the only way to remain relevant in the market.

In the process to set up a Giga factory to make cells, what you end up doing is you get a few suppliers as your technology partners, for all the material that is going into our cell. Although we are looking at 50MWh right now, our conversation with the vendor is 'will you stay with me when I'm at 5GWh? I'm going to use your material today, the moment I invest in this material and set up my chemistry on to that I would require tons of it when I go to giga… are you committing? Are you putting up allocation on your mining for me?'

These are the pivotal conversations that allow a much deeper level of planning for scale-up and steady material supply. 

The policies are largely technology agnostic, like the PLI schemes, the main concern is to achieve a certain production mark within a set period. The urgency with which we are setting up things to speed roll to achieve our various targets… are we missing out on some pertinent factors?  

Why did we get such low representation in the PLI? What it indicates is two things are happening: one is that full knowledge of what I need to do in the future is not available, and hence when you don't know what you are going to do, you tend to wait and watch.

You are right in certain ways, the PLI scheme is designed to force the manufacturers to perform and produce at a certain scale. It can box up a manufacturing setup into certain output performance, which might put a lot of stress on the manufacturer. PLI schemes requisite is that a certain percentage of the materials being used to produce cells has to be indigenized.

This is a big bottleneck since India doesn't produce battery-grade finished materials, hence it is a challenge for Li-Ion cell manufacturers to show the number of indigenous materials in their cell manufacturing process.

At Log9 we decided to understand what India needs. What the Indian customers are asking for is fast charging time. We also saw the B2B cases and realized what the businesses are wanting now is something that can go 100km on a single charge. They want their business to be switched on 12-14-18 hrs a day for deliveries morning to evening. What they are asking for is a vehicle that can be constantly charged and constantly put on the road. So, since charging became a big point, we decided to choose chemistry, which enables fast charging.

User behaviour is one of the few things that cannot be predicted, especially in a new environment like E-mobility. How do you factor in the unpredictability of user demand in your business?

What happens in the Indian businesses is 'show me the demand and I'll make a product to meet that demand'. In my opinion, whenever a new category of business comes up it happens in a reverse way. In a new category, market demand creation and technology creation happen hand-in-hand. Demand generation is also the responsibility of EV technology companies. Fifty percent of Log9 is engaged in demand creation, and 50 percent is plugged into product creation. If we don't create demand and wait for somebody else to create the demand, then we are already late to the market. Whenever you create a new category, demand doesn't exist, you have to create new demand as well – you have to position the product, the USP, the safety, everything… you create a demand in the market and serve that demand through your product that is a real Product-market fit.

How do you handle the erratic nature of demand?

That's standard deviation, that's ok. There will be incidents like fires, it has always been like that. If you can place the product that the customer needs, it will sell, there will be a standard deviation. How the customer is going to react is part of the business development. For demand creation don't go sell the vehicle first, sell the 'peace of mind' first.

When we first talked to one of our 3W OEM partners, they were making 20 vehicles a month. We suggested that we should target 20 vehicles a day. It was an audacious proposal and it took some time for our OEM partner to see how demand creation would fuel product scale. However, within 3 months we reached a 20-vehicles-a-day production rate and the product demand kept increasing.

What I'm trying to say is, that we all see these two things separately. We expect somebody else to create demand for our product or technology. However, as I mentioned, in a new category, you are the demand creator. The reason our economy is still held back is that we are demand responders rather than demand creators. So don't wait for EV demand to reach a certain percentage and then switch, first switch to create a demand and then move your product there. At Log9 demand creation is very much ingrained in our mind, as long as we don't create demand, nothing will move fast.