Indian Oil Corporation Ltd (IOCL), a state-run entity, has revealed plans to establish a joint venture with Panasonic Energy from Japan for the production of cylindrical lithium-ion cells in India.
Following the signing of a heads of agreement on January 21, the companies have now inked a binding term sheet to outline the framework for the joint venture. A heads of agreement is a preliminary, non-binding document outlining the key terms of a potential sale, partnership, or other agreement.
The two entities are presently engaged in a feasibility study to explore battery technology’s role in supporting India’s shift towards clean energy. According to a regulatory filing, both companies aim to finalize the details of their collaboration by the summer.
The move comes at a time when lithium-ion cell manufacturing in India is witnessing a surge in momentum, driven by strong demand from electric vehicles and battery energy storage systems (BESS).
In a statement, IOCL highlighted, “Aiming to facilitate India’s transition to clean energy, Indian Oil Corporation Limited and Panasonic Energy Co. Ltd. have signed a binding term sheet to establish a joint venture for manufacturing cylindrical lithium-ion cells in India, foreseeing the growing demand for batteries in two- and three-wheel vehicles and energy storage systems in the Indian market.”
The filing further emphasized that besides meeting domestic demand, investments in local manufacturing will help establish a comprehensive supply chain ecosystem, enhancing India’s self-reliance and global energy standing. The joint venture is expected to stimulate raw material sourcing within the country, boost domestic value addition, and attract more players into the market.
IOCL has been exploring diversification strategies as part of its objective to achieve net-zero carbon emissions from its operations by 2046. In recent years, the company has been actively involved in developing clean energy sources such as solar power, biofuels, and hydrogen.
“Leveraging Panasonic Energy’s expertise in battery development and manufacturing, both companies are committed to advancing the lithium-ion battery industry and supporting India’s energy transition while working towards the goal of fostering a sustainable society,” the filing stated.
Panasonic Energy Co Ltd, established in April 2022 as part of the Panasonic Group’s transition to an operating company system, offers battery technology-based products and solutions worldwide.
IOCL shares closed at ₹167.75 on the BSE on Thursday, marking a 0.90% increase from the previous close.
