THE DELHI GOVERNMENT'S crackdown on polluting vehicles has given the ruling Aam Aadmi Party a boost, and shot chief minister Arvind Kejriwal into the global arena as a campaigner for the environment. There are several detractors to the government’s “odd-even” scheme, under which cars with odd-number licence plates can ply on odd-number days. While the government claims that the scheme has been a success, those who monitor pollution levels say there hasn’t been a significant improvement. But this isn’t about the success or failure of the scheme. It’s about an unexpected beneficiary: battery makers.

One of the prominent exemptions to the odd-even rule is hybrid (electric and petrol) cars and electric cars. There have been reports about enterprising youth putting together home-made hybridisation kits, which basically means providing car owners with a set of lithium batteries and some way of hooking them up to the engine. It’s a Mickey Mouse operation now, but has the potential to grow rapidly, and not just because of the odd-even scheme.

A Bloomberg study from February found that electric vehicles recorded a year-on-year growth of 60% in 2015 and predicted that they could displace oil demand by 2 million barrels a day by 2023. Add a 50% annual growth in solar panels, and lithium batteries look set to be a game changer. Another report, this time by McKinsey, adds that by 2025, the cost of lithium battery-generated power will drop from $350 (Rs 22,110) per kWh currently to $160 per kWh.

“Lithium-ion batteries are the answer to the future demand for energy. Besides catering to utility consumers, they are an option for commercial customers looking to improve reliability [of power supply]. Power producers and grid operators can use them to meet peak-hour demand and to blend renewable energy into their supply,” says Manish Sharma, executive officer of Panasonic Corporation, and president and CEO of Panasonic India.

According to green energy consultants SNE Research, Panasonic has 20.5% of the global lithium battery market, with Samsung, LG Chem, and Sony among other important players.

Lithium batteries will also be a vital piece for governments to meet green targets mandated under global conventions. India has set a target to produce 179 GW of clean energy by 2022. “The future of the power sector and the planet’s sustainability revolves around renewables. We believe that there will be disruption in the solar and energy storage segment,” says Sharma.

To be sure, there will be infrastructure challenges, like building extensive charging networks for electric vehicles, but as adoption grows, investment is expected to follow.