Ankur Dialogues | Cell to Sell: Inside Battery Manufacturing

The next decade of technology may be as much about atoms as it is about bits. Nowhere is this shift more consequential than in energy.

As India accelerates its transition towards renewable energy and electric mobility, one question is becoming increasingly important: how do we build the energy storage technologies that will underpin this transition and build them in India?

At Ankur Capital’s recent Cell to Sell conversation, we brought together two builders working on different battery chemistries and applications: Rishi from OffGrid Energy Labs, focused on stationary energy storage, and Vishal, who was part of the team that built Ola Electric’s battery capabilities. The discussion explored everything from the economics of different chemistries to the much harder challenge of taking physical science from a laboratory breakthrough to a commercially viable product.

The energy transition is becoming a storage problem

For more than a century, the central challenge of electricity was generation: how do we produce more electrons, at lower cost?

That equation is changing.

The rapid decline in the cost of solar and wind generation means that renewable electricity can increasingly be generated at very competitive costs. But renewable generation is intermittent. The sun does not shine at night, and wind does not necessarily blow when demand peaks.

That makes storage critical.

In stationary applications, storage is essentially about moving energy through time, capturing electricity when renewable generation is available and delivering it when it is needed.

India is still at the beginning of this journey. Installed stationary energy storage remains tiny relative to the country's overall electricity requirements, while electricity demand continues to grow. As renewable penetration increases, the requirement for storage will grow with it.

The opportunity, therefore, is not simply about building more batteries. It is about developing the right storage technology for each application.

There will not be one battery chemistry for everything

Lithium ion has become synonymous with batteries, and for good reason. Its combination of energy density, portability and rapidly improving economics makes it particularly well suited to applications such as consumer electronics and electric vehicles.

But stationary storage has a fundamentally different set of requirements.

When space and weight are less important, other factors such as cycle life, safety, duration and total cost of ownership become increasingly important.

This is where technologies such as zinc bromine and vanadium redox flow batteries can play a role.

The discussion highlighted an important economic distinction: lithium ion can be highly competitive for shorter duration applications, but its economics become more challenging as storage duration increases. Flow batteries, by contrast, can offer long operating lives and can be configured for longer duration storage by scaling the electrolyte capacity.

The implication is important: the future of energy storage is unlikely to be a winner takes all market.

Different chemistries may ultimately serve different combinations of duration, cost, safety, geography and application.

In other words, the question is not lithium versus everything else. It is which chemistry is best suited to which job?

From chemistry to commercial product

This is where physical science differs fundamentally from software.

A software product can be iterated, patched and deployed relatively quickly. Physical technologies do not offer the same luxury.

A promising chemistry demonstrated in a laboratory is only the beginning.

The journey involves moving from:

Lab → Prototype → Pilot → Demonstration → Commercial production → Scale

And every step introduces new challenges.

A chemistry that works at laboratory scale may behave differently when production is scaled by 100x. Manufacturing processes need to be engineered. Contamination has to be controlled. Components and supply chains need to be developed. Safety and certification requirements have to be met.

And eventually, customers need to trust the product.

That last point is particularly important for batteries because their expected operating lives can stretch across decades. A new company cannot simply tell a customer that a battery will last 20 or 30 years. It needs years of testing, performance data and validation to establish that confidence.

This makes physical science inherently capital intensive, time intensive and experimentation intensive.

The hidden economics of energy storage

The headline cost of a battery cell is only one part of the equation.

For customers, the real metric is increasingly levelized cost of storage (LCOS), the cost of storing and delivering each unit of energy over the life of the asset.

That calculation brings in a much broader set of variables:

• Initial capital cost
• Cycle life
• Efficiency
• Safety
• Maintenance
• Insurance
• Degradation
• Replacement requirements
• Supply chain risk
• Duration of storage
• Expected life of the asset it is paired with

This is why a technology with a higher upfront cost can potentially become attractive over a longer operating life.

It also explains why the optimal chemistry may differ depending on whether the battery is powering a vehicle for several years or supporting a renewable energy installation designed to operate for decades.

Energy security is becoming technology security

There is another dimension to the battery conversation that has become increasingly difficult to ignore: supply chain concentration.

Much of the world's battery manufacturing ecosystem is concentrated in China. China has played a major role in driving down the cost of batteries and renewable energy technologies through enormous manufacturing scale and sustained investment.

But dependence on concentrated supply chains creates strategic vulnerabilities.

For India, developing domestic capabilities in cell chemistry, manufacturing and energy storage is therefore not only an industrial opportunity. It is also about building resilience in a technology that will sit at the heart of the economy.

The goal is not necessarily to replicate every part of the existing global battery ecosystem. It is to develop fundamental capabilities where India can build differentiated technologies and compete globally.

Why scaling physical science requires a different kind of company building

One of the biggest takeaways from the conversation was that technological breakthroughs and commercial breakthroughs are not the same thing.

A chemistry can be scientifically proven and still fail to become a viable business.

The transition to commercialisation requires a combination of:

Science + engineering + manufacturing + certification + data + customers + capital.

Each stage creates a new proof point.

Can the chemistry work?

Can it be manufactured consistently?

Can it operate safely?

Can it meet certification requirements?

Can it perform reliably in the field?

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