New Delhi: State-run Indian Oil Corporation Ltd (IOCL) has announced it will form a joint venture with Japan’s Panasonic Energy to manufacture cylindrical lithium-ion cells in India.
The companies have now signed a binding term sheet to draw up a framework for the joint venture, after signing a heads of agreement on 21 January. A heads of agreement is a non-binding document outlining the main issues relevant to a tentative sale, partnership, or other agreement.
The two companies are currently conducting a feasibility study on using battery technology to facilitate India’s transition to clean energy. The filing said both companies aim to finalise details of their collaboration by this summer.
The development comes as lithium-ion cell manufacturing in India is gaining momentum with robust demand from both electric vehicles and battery energy storage systems (BESS).
IOCL said in a regulatory filing on Sunday, “Aiming to empower the transition to clean energy in India, Indian Oil Corporation Limited and Panasonic Energy Co. Ltd. have signed a binding term sheet to draw a framework for formation of a JV for manufacturing cylindrical lithium-ion cells in India in anticipation of expanding demand for batteries for two-and three-wheel vehicles and energy storage systems in the Indian market.”
“In addition to meeting domestic requirements, investments in setting up local manufacturing will set up a complete supply chain ecosystem improving India’s self-reliance, fortifying India’s position in the global energy landscape,” it added. IOCL said the joint venture will also create demand for raw-material sourcing within the country, enhance domestic value addition, and encourage more companies to enter the market.
The oil marketing company has been looking to diversify its operations as it aims to achieve net-zero carbon emissions from operations by 2046. In recent years, Indian Oil has been involved in developing clean energy sources, including solar power, biofuels and hydrogen.
“Leveraging Panasonic Energy’s expertise in battery development and manufacturing, both companies will strive to contribute to the growth of the lithium-ion battery industry and to India’s energy transition, while pursuing its mission of helping to build a sustainable society,” said the filing.
Panasonic Energy Co Ltd, established in April 2022 as part of the Panasonic Group’s switch to an operating company system, provides battery technology-based products and solutions globally.
Shares of IOCL closed at ₹167.75 on the BSE on Thursday, up 0.90% from their previous close.
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