Batteries are the New Oil?
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In today’s edition of The Daily Brief:
What’s the big deal with batteries anyway?
The RBI intends to tread lightly
What’s the big deal with batteries anyway?
Batteries, it sometimes seems, are the talk of the town. There’s been a huge surge in interest, recently, around batteries — much of it fueled by their pivotal role in the green energy transition. In particular, two areas are driving today’s battery boom.
First, Electric Vehicles (EVs).
Batteries are at the heart of the EV shift. They’ve quickly become the costliest component of an EV — historically as much as 30-50% of the car’s cost. Thanks to improving technology and scale, battery costs are falling. Average EV battery pack prices dipped below $100 per kWh recently, in fact. Nevertheless, they remain a major factor in vehicle pricing. And so, as EV sales skyrocket, battery demand is booming.
Second, grid-level storage.
Solar panels only generate power when the sun shines, and wind turbines only when it’s windy. If you want to keep the lights on 24/7 with renewable energy, you need to store excess power and use it later. That’s where grid-scale battery installations (often called Battery Energy Storage Systems, BESS) come in.
These can soak up surplus power, when power generation peaks, and then release it later — when demand exceeds supply. They can also step in quickly to stabilize the grid if there’s a fluctuation. As Duttatreya Das of energy think-tank Ember puts it:
“Battery is the single biggest missing piece in a renewable powered world. They add a lot of value – firming up renewables, shifting excess solar generation to evening peaks, providing stability to grid fluctuations and so on. They would become much more essential for the power system as the share of solar and wind grows exponentially.”
Batteries aren’t new, of course.
They’ve been used for decades, running everything from your inverter to your mobile phone. But these segments, while important, are growing relatively slowly. EVs and large-scale renewable storage, on the other hand, are experiencing exponential growth, driving demand at a scale that we’ve never seen.
We are no energy experts, but there’s one thing we can say confidently: there’s no energy transition without batteries. That means continued carbon emissions, rising temperatures, heat waves, melting glaciers...
Basically, batteries are important.
So we decided to read up on them and share what we learnt. This in no way is a "one-big read on everything battery" — we’re frankly just starting to learn about them — but it’s definitely what every beginner should read to get up to speed on battery basics, use cases, and why they matter. But do note that this isn’t the final word.
Battery Basics: Types and Terminology
Battery types differ by chemistry — and over time, we’ve seen battery chemistries evolve. Here are the big ones:
Lead-Acid Batteries: Cheap and reliable for starter batteries in cars and UPS systems, but too heavy and limited for modern uses like long-range EVs.
Nickel-based Batteries: Once popular in electronics and early hybrids (Toyota Prius), they’re more energy-dense than lead-acid. But now, they’ve mostly been replaced by lithium-ion batteries.
Lithium-Ion Batteries (Li-ion): The gold standard for portable electronics and EVs. Commercialized in the 1990s, they’re lighter and more energy-dense than lead-acid or nickel batteries. Li-ion batteries come in multiple chemistries—the most common are NMC and LFP.
NMC batteries use nickel, manganese, and cobalt. They offer high energy density, making them ideal for lightweight EVs and long smartphone battery life. Due to cobalt’s high cost, supply issues and ethical concerns, manufacturers are cutting its use. There’s one big catch: NMC batteries can overheat if damaged or mismanaged — and occasionally, they explode.
LFP batteries use iron and phosphate — no nickel or cobalt. They’re cheaper, safer, and resist overheating. But there’s a trade-off: these batteries have lower energy density, making them much heavier. Recent innovations have improved LFP’s energy density, closing its gap with NMC. It’s now about 30% cheaper than NMC per kWh. LFP now powers nearly half of new EVs globally.
New and Emerging Chemistries: There are new technologies on the block. Solid-state batteries, for instance, promise higher energy density and safety — though they aren’t yet commercially available for EVs. People are also working on sodium-ion batteries — sodium is cheap and easy to find, though it currently offers lower energy density.
No battery type excels at everything. Most come with some sort of trade off. Higher performance usually means higher cost or shorter lifespan. You’re likely to use different battery types for different needs.
On top of this, batteries are tailored to their purpose. Even if a Tesla car and home solar system battery are both made of lithium-ion, they’ll probably differ considerably in chemistry and design.
Battery Value Chain: Who Does What and Where?
What does it take to make a battery? And who are the major players at each step?
Batteries have a huge value chain, with many stages that are spread across the world. These span from mining raw materials to assembling battery packs. Here’s a simplified walkthrough:
Raw Material Mining: Modern batteries rely on certain key minerals: Lithium, Cobalt, Nickel, Manganese, and Graphite. These resources are not evenly distributed around the world, of course, which leads to geographic concentrations:
Lithium is often called “white gold” of batteries. We’ve talked about it in detail before. The largest producer is Australia, which alone provides over half of the world’s lithium. Then comes the “Lithium Triangle” in South America. Recently, there was excitement about a large lithium deposit found in Jammu & Kashmir, India – but it’s still early days for that find.
Cobalt is heavily concentrated in the Democratic Republic of Congo (DRC) — in fact, about 70% of the world’s cobalt comes from the DRC. There’s an ugly side to this. DRC has an abundance of cobalt, but a lot of it is mined by modern-day slave labour — which is often given the euphemism “artisanal cobalt”.
Nickel is mined in many countries. But for battery-grade nickel, Indonesia has become a dominant player. Other nickel sources include Russia, Australia, Canada, and the Philippines. Nickel is less “rare” than cobalt, but high-grade processing is specialized.
Graphite can be natural (mined) or synthesised artificially. Here, China utterly dominates the supply chain: it not only has large natural graphite mines, but also produces the vast majority of battery-grade graphite. Nobody else comes close.
Raw Material Refining & Processing: After mining, raw materials are refined into high-purity battery chemicals (e.g., lithium carbonate, cobalt sulfate, nickel sulfate). This critical, energy-intensive step is dominated entirely by China, which controls roughly 80% of global lithium refining and similar shares for cobalt and nickel.
Component Manufacturing (Cathodes, Anodes, etc.): These purified materials are then turned into battery components — including cathodes, anodes, electrolytes, and separators. Once again, these are all largely produced by China — alongside a few other East Asian countries.
Cell Manufacturing: At this point, all those components come together to make a battery cell. Cell production is highly sophisticated and capital-intensive, requiring gigafactories. China produces over three-quarters of all battery cells globally. That’s a staggering share — dominated by companies like CATL and BYD (both Chinese), who themselves account for a large chunk of the world’s battery supply.
The remaining big cell producers are primarily South Korea (LG Energy Solution, Samsung) and Japan (Panasonic).
Battery Pack Assembly: Finally, many different cells are packaged together into battery packs. In an electric car, for example, hundreds or thousands of cells are combined into modules and packs — which are then installed in the vehicle. Pack assembly is often done close to where the final product is put together, to reduce shipping of heavy batteries and to tailor the pack to the specific product.
You’ve probably seen China’s name all over this list. That, to us, can be a problem. Let’s talk specifically about India in this context — both, because that’s the country we care the most about, and because it illustrates the challenges of trying to secure one’s place in the battery race.
India’s Battery Story
India’s battery industry traditionally made lead-acid batteries.
Companies like Exide Industries and Amara Raja have long supplied batteries for conventional automobiles, as well as for home inverters and telecom tower backups. However, lead-acid technology is not a viable solution for deep decarbonization – it’s too heavy for EVs and unsuitable for large-scale grid storage.
The global pivot to lithium-ion caught India on the backfoot. As of the mid-2020s, India does not yet manufacture advanced lithium-ion battery cells at a large scale. Virtually all lithium-ion cells used in India’s EVs or grid projects are imported — mostly from China or other East Asian suppliers. In fact, about 75% of India’s lithium-ion battery cell imports come from China alone. While Indian companies often assemble those imported cells into battery packs, we don’t have the ability to make cells ourselves.
This import dependence is a strategic vulnerability – both economically and in terms of supply security. China can always use this in its favour to arm-twist India, as it was doing with rare-earths until recently.
The Indian government understands this weakness. To kickstart a domestic battery ecosystem, it launched a Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) batteries in 2021. This program earmarked ₹18,100 crore in incentives to encourage companies to set up battery gigafactories in India.
In 2022, after a bidding process, the government awarded manufacturing capacity to four winners: Ola Electric, Hyundai Global Motors, Reliance New Energy, and Rajesh Exports. These companies essentially committed to building large cell factories. The plan was that within a couple of years, these plants would be up and running, producing made-in-India lithium-ion cells for EVs and storage.
However, progress so far has been slower than hoped. By the end of 2024 — about 3 years since the awards — none of those factories had actually started production. Several firms missed their investment and construction milestones. A few days ago, three of the winners requested a one-year deadline extension from the government, after failing to meet the initial setup timelines. Setting up a gigafactory, clearly, isn’t a trivial matter — especially when relying on foreign technology and machinery.
All of this underlines the sheer difficulty of building a lithium-ion battery industry. On the other hand, however, demand is poised to explode:
India is already the world’s fourth-largest automobile market, and the government has strong EV adoption targets of 30% car sales to be electric by 2030.
As the share of solar and wind increases, so will the need for storage to integrate them reliably.
If India cannot produce batteries domestically at scale, it risks its green transition being overly expensive, and worse still, vulnerable to foreign pressure. Policymakers recognize this; hence the push for domestic manufacturing.
Conclusion: A Starting Point, Not the Final Word
We’ve covered a broad range of battery basics – from where batteries are used (and why everyone’s talking about them now), to how different chemistries stack up, to the global supply chain and India’s ambitions. By now, you should have a solid 101-level grasp of why batteries are often called the “linchpin” of a clean energy future and how this is as much a story of markets and geopolitics as it is of technology.
However, this is just the tip of the iceberg. There’s a lot that we are yet to understand ourselves. For instance, next-generation technologies like solid-state batteries could shake up the industry. Charging infrastructure is another crucial piece of the puzzle for EV adoption. Then there’s the question of recycling and second-life use.
We’ll continue our coverage on this sector. Expect future articles to focus on those advanced topics. Because batteries are the new oil – just as oil had a profound impact on the 20th-century economy and geopolitics, batteries could play a similar pivotal role in the 21st-century clean economy.
The RBI intends to tread lightly
There’s a small change that the RBI just brought in — barely three pages, end-to-end — which might just end up being one of the single most consequential changes in financial regulation that we’ve seen in a long time. If you follow the banking and finance sector, this should fundamentally shift your reading of how much regulatory risk the sector faces.
The change was hard to catch if you weren’t paying attention. It came in a document with the sleep-inducing name “Framework for Formulating Regulations”. All it did was talk about all the procedures the RBI must follow, internally, when it introduces or modifies a regulation.
Already bored? Stick with us. It’ll be worth it, we promise.
See, this single, tiny change marks a complete overhaul in how the RBI works with those it regulates. We’ve sometimes used this newsletter to point to India’s many problems with red-tapism. It’s only fair, then, that we celebrate an example of the opposite: where an Indian regulator displays enough maturity to step back, and bind itself in constraints — all to ensure that companies have more clarity in how to conduct their business.
Let’s dive in.
The regulation-by-surprise conundrum
Financial regulation is a tricky business. The work a regulator like the RBI does is unpopular by design. Its very job is to pursue stability — it must act as the adult in the room, shooting down ideas with clear short-term advantages, because of abstract risks that might never come true. It might be forced to stop governments from trying to stimulate economic growth, or stop businesses from chasing creative new business models, even when there’s a strong case to do so — because of theoretical problems from some distant future.
This is why financial regulators are usually kept away from the pressures that other government departments and ministries face. Countries that fail to do so, from Turkey to Argentina, have seen their entire economies disintegrate in the process.
But when a financial regulator becomes too insulated from the outside world, that can backfire too.
That has been a persistent problem for the RBI. The body has often been criticised for ‘regulating-by-surprise’: issuing circulars and notifications without actually talking to the industry, or trying to figure out what impact they could actually have.
Consider this: a 2019 paper by Anirudh Burman and Bhargavi Zaveri looked at the RBI’s regulatory track record, and found major gaps in how it engaged with those it regulated. The RBI had come out with 1064 new bits of law over the period they studied. It invited public comments on just 14 of them — or 1.39%. Nor did it try to spell out its intentions: only 2.09% of its legislative instruments carried an explanation of what they were trying to do with that piece of law.
When businesses don’t have a sense of how regulators think, they operate in an environment of constant uncertainty — something called ‘regulatory risk’.
Take a business like Slice. It was once a unicorn with sky-high ambitions, valued at $1.5 billion. It positioned itself as a credit-card challenger: it teamed with major NBFCs to offer credit on prepaid payment instruments. The offering was popular: at its peak, it easily outstripped some of India’s largest banks, issuing 3 lakh cards a month. In 2022, though, the RBI broke the back of the business, prohibiting NBFCs from entering such partnerships. Ever since then, Slice has struggled to replicate the same success.
Occasionally, even the Supreme Court has found it necessary to hem the RBI in. In February 2018, for instance, the RBI issued an infamous ‘midnight circular,’ asking banks to initiate insolvency proceedings against anyone that defaulted on a loan from the very first day the default began. This threw banks in a tizzy; they were suddenly required to overhaul their entire process of dealing with bad loans, with no way out. Eventually, the Supreme Court stepped in — holding that the circular was entirely outside the RBI’s powers.
These are just some of the many examples of when RBI sprang big surprises on businesses.
Don’t get us wrong. We don’t think the RBI’s decisions were necessarily bad in either case. Both were meant to keep our financial system safe, and ensure that it didn’t see too much risk building up. The RBI’s intentions were never the issue — the problem came with how the RBI, in both cases, took everyone by surprise, giving them no time to react.
If such decisions are the norm, all other entities that the RBI regulates would live in constant fear of being taken by surprise themselves. A circular can come out of nowhere and instantly knock your business out.
A fundamental problem
The heart of the problem, as veteran policymaker KP Krishnan explained in a recent op-ed, is that there’s a ‘democratic deficit’ at the heart of financial decision-making.
See, in theory, in any democracy, laws must be made by elected officials, after discussing what their potential outcomes could be. This isn’t always possible with financial regulations: those require deep subject-matter expertise, and enough flexibility to respond to situations before it’s too late. And so, regulators are given wide powers to shape their domains.
But that also means financial regulators can end up making laws without the rigour that law-making requires.
Back in 2013, this became a major topic of discussion. The government had then formed the Financial Sector Legislative Reforms Commission (FSLRC) — which was tasked with overhauling India’s financial regulation as a whole. If the FSLRC had its way, Indian financial regulation would look very different today: among other things, a single law — the Indian Financial Code — would have governed all of Indian finance. But that’s a discussion for another day.
The FSLRC came out with a profound insight: financial regulators practically ran a tiny government of their own. They made laws, they executed those laws, and they judged any disputes that came out of those laws. To perform all these functions was a massive responsibility. A lot could go wrong. Which is why you need these entities to be accountable.
To plug that gap, the FSLRC proposed a seven-step process. Any new rule would start with a problem statement of what it was trying to achieve. The regulator would then publish a draft of what it proposed, along with a cost–benefit note that spelled out the impact it expected to see. That draft would stay open for at least 30 days, letting all sorts of people comment with their suggestions. These comments would be published — with the regulator explaining what it did, or didn’t do. Once a regulation was passed, it would be revisited every five years, and anyone affected by them would be allowed to appeal to a financial tribunal.
This, it believed, would have a series of benefits. Because everyone would know what was coming, the risk of doing business would come down substantially. Because comments would be published, it would be much harder for insiders to cut deals with regulators. And eventually, with so much public scrutiny, regulators would come out with better laws.
The FSLRC’s report was revolutionary, but it was also still-born. Its recommendations would never see the light of the day. But it remains important for all the new ideas it introduced — ideas that Indian financial regulators have, one-by-one, incorporated into their own manner of functioning.
The RBI is only the latest regulator to do so.
The RBI’s new processes: a long time coming
In 2022, the RBI carried out a huge review of how it went about making regulations.
It appointed a ‘Regulations Review Authority’ (RRA) — an internal body which was tasked with carrying out the first full-scale spring-cleaning of its rule-books in more than two decades. It was asked to “streamline regulatory instructions” and “reduce compliance burden” — not changing how it made regulations. But it soon found itself doing exactly that.
The RRA started sounding out banks, fintechs, trade bodies and RBI’s own internal committees. The exercise was eye-opening: the RBI had hundreds of overlapping circulars, a mass of complex filings, including physical returns to be given in paper, and a complex array of texts that were scattered across a website that was impossible to follow. The Authority recommended scrapping 714 different circulars, and merging, discontinuing or digitising 65 supervisory returns. It also asked the RBI to set up a single “Regulatory Reporting” page, with all the forms an entity would have to fill. This would make life much easier for all of RBI’s regulated entities.
But this, too, wasn’t enough for the RRA. The problem ran much deeper. There saw a wider need to instill ‘drafting discipline’ into the RBI. The RRA created model templates for every instrument the RBI used — each starting with why the RBI had the power to put out that instrument, a purpose statement in English, and an explicit repeal clause to weed out dead texts — among other things. Each important change, it said, would first go out for public consultation, unless speed was crucial — in which case the RBI would have to publish FAQs to explain itself.
In essence, the RRA carried a blueprint to overhaul how the RBI ran. Over the last few years, there has been increasing interest in actually bringing that blueprint to life.
The current RBI chairperson, Sanjay Malhotra, seemed particularly interested in this project. As he told the USISPF last month, “The Reserve Bank too is committed to ensure that our regulations balance the objectives of stability and efficiency. For this purpose, the regulatory review authority (RRA) will further expand, deepen and expedite the process of reviewing and rationalising regulations.”
The “Framework for Formulating Regulations” locks those ideas into binding, day-to-day procedure.
What the latest regulations do
The new framework is, interestingly, a voluntary attempt by the RBI to hold itself to account — so that life is easier for India’s banking and finance sector.
From now on, every draft regulation will be posted on the RBI website, with a short “statement of particulars”. This will give companies a lot of information to work with — including why the RBI has the power to release that regulation, what it’s trying to do, and what impact the regulation will have. These will be kept open for at least 21 days, allowing people to give their comments. The RBI will then publish a response to those comments. If it plans to change the regulations materially, it’ll have to run this process again.
There are some carve-outs. If the RBI is addressing a crisis, for instance, it can skip this whole process — but it must record its reasons for doing so.
What started as a philosophy around financial regulation, one decade ago, is now hard law. Investors will no longer wake up to find whole business models banned without warning. They’ll have a time to react, and a say in the process.
Don’t expect things to shift overnight. For good regulation, it’ll have to get used to these processes, and build its internal capacity to pull such a procedure off. That’s a longer term project.
But if you’re sizing an investment in the sector, the ‘regulatory risk’ will no longer be quite as severe. Investors will no longer wake up to find whole business models banned without warning. As veteran investor Mark Mobius recently wrote, while India is his top market to invest in, India’s mountain of paperwork holds him back. The new framework brings down that burden, even if just by a little bit.
Tidbits
Reliance Raises $2.9 Billion in Dual-Currency Offshore Loan, Largest by Indian Firm in Over a Year
Source: Business Standard
Reliance Industries Ltd. has raised $2.9 billion through a dual-currency offshore syndicated loan, marking the largest such deal by an Indian company in more than a year. The loan includes $2.4 billion in US dollars and ¥67.7 billion (approximately $462 million) in Japanese yen. Backed by 55 participating banks, this transaction also represents the largest lender group for any Asian syndicated loan in 2025. The company holds investment-grade credit ratings of Baa2 from Moody’s and BBB from Fitch, both one notch above India's sovereign rating. The transaction is a key contributor to the $10.4 billion already raised by Indian companies via offshore loans this year, setting a record for the fastest pace of foreign borrowing year-to-date in a decade.Singtel Nets S$1.4 Billion from Partial Stake Sale in Bharti Airtel
Source: Reuters
Singapore Telecommunications (Singtel) has sold 71 million shares of Bharti Airtel through its unit Pastel Ltd, fetching S$2 billion (US$1.54 billion) at a price of ₹1,814 per share—representing a 2.85% discount to Airtel’s previous closing price. The transaction reduces Singtel’s direct stake in Airtel from 29.5% to 28.3%, with the remaining holding valued at approximately S$48 billion. The sale has resulted in an estimated gain of S$1.4 billion for Singtel. The company said this move is part of its broader portfolio rebalancing strategy. Bharti Airtel has not issued a comment on the development.ITC Hotels Reports Strong Q4 FY25 Performance Post-Demerger
Source: Business Line
ITC Hotels reported a 43.77% year-on-year jump in standalone net profit to ₹264.05 crore in Q4 FY25, compared to ₹183.66 crore in the same period last year. Revenue from operations rose 13% to ₹981.49 crore. On a consolidated basis, net profit stood at ₹257.85 crore, up 40.36% YoY, while revenue climbed 16.89% to ₹1,060.62 crore. The company recorded a 16% growth in room revenues, with average daily rates at ₹15,000 and occupancy reaching 79%, resulting in a 17% rise in RevPAR. Food and beverage revenue increased 12% year-on-year. Operating margins expanded, with EBITDA margin rising by 350 basis points to 40%. The company also announced a ₹328 crore capital expenditure to develop a new 200-room hotel in Visakhapatnam, expected to be completed by 2029. This marks the company’s first results after its demerger from ITC Ltd., with ITC retaining a 40% stake.
- This edition of the newsletter was written by Pranav and Kashish.
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