Tata Group’s battery unit, Agratas, is creating proprietary lithium iron phosphate (LFP) cell technology for its Sanand factory. This move follows China's tighter control over battery manufacturing exports, forcing the company to shift from external technology reliance to self-reliance. This development is essential for India’s growing grid-scale energy storage needs, though it may increase initial production costs and timelines.
Tata Group is intensifying its efforts to build a local battery manufacturing supply chain through its subsidiary, Agratas Energy Storage Solutions. The company has begun work on developing its own lithium iron phosphate (LFP) battery cell technology, a strategic pivot necessitated by China's stricter export rules on manufacturing knowledge, which have limited the ability of Indian firms to license established processes.
Agratas is setting up a pilot production line for these domestically designed LFP cells at its manufacturing facility in Sanand, Gujarat. To support this, the company has assembled a technical team with engineers from India, South Korea, and China to refine manufacturing processes and validate battery performance. This represents a significant shift in strategy, as the firm moves away from its earlier plan of relying on third-party technology providers.
Developing battery technology internally introduces new business variables. Unlike its work on nickel manganese cobalt (NMC) cells, where Agratas is licensing established technology from Japan’s Automotive Energy Supply Corp. to support a faster rollout, the in-house LFP program is expected to require more time and higher capital spending before reaching commercial scale. Managing these costs while balancing the production timelines at the Sanand plant will be a key factor for the company's financial performance in the coming years.
LFP batteries are favored for their cost-effectiveness and safety, making them highly suitable for grid-scale energy storage projects. As India pushes toward its renewable energy goals, there is an increasing demand for large-scale storage solutions that can stabilize the power grid. Agratas is supporting this R&D effort with an investment of over $400 million in a new research facility in Bengaluru dedicated to LFP and related battery chemistries.
The broader timeline for Tata’s battery manufacturing unit remains ambitious. While the Indian facility works toward building a local ecosystem, Agratas is also preparing for operations in Somerset, England, which is expected to start production around mid-2025, primarily to supply Jaguar Land Rover for the Range Rover Electric SUV. Meanwhile, production of the licensed NMC cells in India is currently on track to begin by early 2027.
For investors, the success of this strategy will depend on how quickly Agratas can move from the pilot stage to full-scale production without significant cost overruns or delays. Monitoring the commissioning timelines at the Sanand plant and the company's ability to maintain competitive production costs against global players will be important for assessing the long-term impact of this business unit on the group’s overall manufacturing capabilities.