India's fast adoption of EVs likely to increase copper imports

With the fast adoption of electric mobility and a transition to renewable energy, India's reliance on copper imports is likely to increase. Copper imports increased from $2.2 billion in fiscal year (FY) 2021 to $2.9 billion in FY 2022.

To deliver one MW of power, solar photovoltaic and onshore wind platforms each require about 3,000 kg of copper. Offshore wind power generation uses far more copper, needing more than 8,000 kg per MW.

Copper is a vital component of an electric vehicle (EV), and increased EV penetration will lead to an increase in copper demand from the auto sector, which now accounts for over 10% of India's overall copper consumption of roughly 1.1 million tonnes (MT).

Hetal Gandhi, head of CRISIL Research, told the media that renewables and the automotive industry would push demand to over two million tonnes by 2030, assuming India meets its targets of more than 450 GW of renewable power generation and 30% EV adoption in passenger vehicles.

In such a situation, demand from the car industry will account for more than 25% of overall demand.

Primary copper production capacity is held by Hindalco, Vedanta, and HCL. Despite having a combined capacity of over 1,000-kilo tonnes per year, the output is only approximately 600-kilo tonnes per year. The closing of Vedanta's Tuticorin facility in 2018 reduced India's domestic copper production.

Adani has received environmental approval for a 1,000-kilo tonne copper facility that would cost Rs 11,000 crore to build. In 3-4 years, the factory will be operational. Despite this, India's copper dependency will increase, necessitating more local copper output to close the gap.

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