Amara Raja Batteries Expands Globally, Lead-Acid Technology is still relevant

Amara Raja Batteries, a leading player in the automotive battery industry, is doubling down on its commitment to lead-acid battery technology despite the growing prominence of Lithium-ion batteries in electric vehicles (EVs). The Hyderabad-based company plans to expand its manufacturing operations overseas, driven by the continued demand for lead-acid batteries in internal combustion engine vehicles. This move is part of a broader strategy to achieve a revenue target of USD 6 billion by 2029.

Lead-Acid Batteries: Still Relevant for the Next Decade

While the future of electric vehicles is largely tied to Lithium-ion batteries, Amara Raja Batteries is confident that lead-acid batteries will remain in demand for at least another decade. 

Harshavardhana Gourineni, Executive Director of Amara Raja Energy & Mobility, expressed a "conservative" outlook on the continued relevance of lead-acid batteries. He highlighted that the company sees significant opportunities to grow both domestically and internationally through inorganic expansion.

"We're looking to unlock some capacity domestically and also explore consolidation opportunities globally," Gourineni told ETAuto. 

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Manufacturing and Market Presence

Amara Raja operates a manufacturing network of eight plants located across Tirupati and Chittoor in Andhra Pradesh, with a total annual production capacity of 50 million batteries. Of this, 40 million are two-wheeler batteries. The company leads the Indian market in two-wheeler batteries and holds second place behind Exide in the four-wheeler segment.

The company’s sales strategy is diverse, aiming for a 50% contribution from the domestic aftermarket, 25% from original equipment manufacturers (OEMs), and 25% from exports. Gourineni noted, however, that export growth is accelerating, which could shift these ratios in the future.

International Expansion Strategy

As part of its internationalisation strategy, Amara Raja is eyeing new markets, particularly in Europe, Southeast Asia, and the Middle East, where it already has a presence. The company also aims to overcome significant import duty barriers in regions like North Africa and the Middle East by establishing local manufacturing facilities.

"If we can secure some capacity and offer technology to the region, it would positively impact our bottom line," said Gourineni.

The company is targeting midsize firms that are not heavily invested in advanced battery technologies for EVs. Although Gourineni did not disclose the financial details of these inorganic moves, he emphasised that Amara Raja’s debt-free status allows it to explore multiple opportunities.

Growth Ambitions and New Energy Business

Amara Raja Group, which currently has a turnover of USD 2 billion (INR 200 crore), is aiming to triple its top line to USD 6 billion (INR 600 crore) by 2029. The legacy lead-acid battery business is expected to contribute around half of this growth. However, the company is also investing significantly in its new energy business, particularly in lithium-ion batteries, which are poised to be the major growth driver.

To support this new venture, Amara Raja has announced a INR 9,500 crore plan to establish the Amara Raja Giga Corridor, which will have a production capacity of 16 GWh for cells and 5 GWh for battery packs over the next decade. The company is also exploring partnerships to enhance capabilities in areas like power electronics and battery management systems (BMS).

Strategic Partnerships in Lithium-Ion Batteries

Amara Raja has already forged key partnerships in the lithium-ion battery sector. It has signed a technology agreement with Gotion-InoBat Batteries, a joint venture between Chinese firm Gotion and Slovakian company InoBat, to manufacture Lithium Iron Phosphate (LFP) cells in India. Additionally, the company holds a 9.23% equity stake in InoBat.

In August, Amara Raja entered into a technology collaboration with Jiangsu Highstar Battery Manufacturing, a Chinese company specializing in Lithium-ion batteries using Nickel Manganese Cobalt (NMC) chemistry.

Continued Focus on Lead-Acid Technology

Despite its expansion into lithium-ion batteries, Amara Raja remains committed to its lead-acid battery business. Gourineni noted that increasing electrical demands in modern vehicles, such as backup cameras and advanced safety systems, require improved battery performance. Amara Raja is focusing on advanced lead-acid battery technologies like Absorbent Glass Mat (AGM) and Bipolar batteries.

"These electrical demands require better-performing batteries, and we are betting on superior lead-acid battery technologies," Gourineni said.

Amara Raja has been producing AGM batteries for several years and is actively working on further innovations in this space.

By maintaining its strong position in the lead-acid battery market while investing in new energy technologies, Amara Raja Batteries is well-positioned to capitalize on both legacy and emerging opportunities. The company’s aggressive growth and international expansion plans are key to its vision of achieving USD 6 billion in revenue by 2029.