Epsilon Group Inks INR 15,350 Cr Deal To Build EV Battery Facility In Karnataka

Amid rising demand for electric vehicles (EVs) in India, Epsilon Group has agreed to invest INR 15,350 Cr (about $1.8 Bn) for setting up a manufacturing and research facility for EV battery testing and advanced materials in Karnataka.

The global battery material manufacturer signed a memorandum of understanding (MoU) with the Karnataka government at the four-day global investors conference, ‘Invest Karnataka 2025’ on Wednesday to give effect to the plan, PTI reported.

This strategic investment, planned over the next 10 years, is expected to strengthen the domestic EV ecosystem and help India cement itself as a hub for advanced battery technology.

As part of the deal, Epsilon Group and its subsidiaries Epsilon Advanced Materials and Epsilon CAM will make sustainable graphite anode and lithium iron phosphate (LFP) cathode battery materials. Meanwhile, Inspire Energy Center will engage in R&D, testing, and training for EV battery materials and battery manufacturers.

Epsilon will invest INR 9K Cr to set up a Graphite Anode manufacturing plant, INR 6K crore for an LFP Cathode manufacturing plant, and INR 350 Cr for battery materials and battery testing R&D and training centre.

The development comes at a time when EV adoption is on the rise in the country. According to Inc42’s latest report ‘India’s Electric Vehicle Startup Landscape 2025’, more than 1.26 Mn EVs were sold in the country in 2024 alone, with two-wheeler EVs accounting for 85-90% of all EV sales.

The entry of legacy automotive players has fuelled the pace of EV adoption, while tax benefits, such as the reduction of GST on EVs to 5% from 10% earlier, and government incentives for developing EV charging infrastructure have lowered cost barriers. 

According to the report, the EV segment has achieved 10% market penetration in the 2W category and 20% penetration in the 3W cargo vehicle category. However, adoption remains muted in the 3W passenger EV category and the 4W category due to high upfront costs and underdeveloped charging infrastructure.

The Economic Survey 2024-25 called for increased R&D in advanced battery technologies such as sodium-ion and solid-state batteries to further strengthen India’s EV ecosystem.

India still relies on China for 75% of its lithium-ion battery demand. While China’s dominance in the global EV supply chain has helped India meet its short-term goals, “indigenising the technology and raw materials for electric mobility,” is crucial to sustaining the growth momentum, the Survey said.

The role of homegrown battery tech startups, therefore, gains more prominence. While the segment has hitherto raised $37 Mn in funding since 2014, its full potential will only be realised with greater support from OEMs and the government.

India’s EV market, currently valued at $54 Bn, is expected to reach a market size of $132 Bn by 2030. The space has already minted a unicorn ‘Ola Electric’, which went public last August, while Ather Energy is set to float its INR 3,100 Cr IPO this year.