Neuron Energy, a Mumbai-based lithium-ion battery manufacturer, will invest ₹500 million ($6.04 million) to increase production capacity.

The investment will be split into ₹350 million ($4.2 million) of working capital and ₹150 million ($1.8 million) of equity from the promoters and strategic partners.

A portion of the funds will be used to increase capacity, while 40% of it will be directed toward fulfilling orders from large original equipment manufacturers (OEMs).

The investment will also help the company increase its cash flows.

As part of its expansion plans, Neuron has planned to construct a mega-plant serving the 2-wheelers and 3-wheeler segment of Electric Vehicles (EV).

The company said the decision to invest is in response to the increasing demand for Li-ion batteries, which testifies to the growing popularity of electric mobility.

Pratik Kamdar, Co-Founder of Neuron Energy, said the company planned to expand production capacity and enhance research and development.

“This investment will help us equalize the demand-supply ratio for batteries,” he said, expressing confidence about meeting the growing order book.

The company said its battery product line used a microprocessor-based battery management system.

Other features include four temperature sensors, appropriate cell spacing for thermal management and the Neuron App for remote assistance.

Neuron also has plans for backward integration into stocking raw materials and handling production with a contract manufacturer.

The company provides lead-acid and lithium-ion technology batteries for E-Bike, E-Rickshaws, and Golf Carts.

Recently Nitin Gadkari, Minister of Road Transport and Highways, told the Lok Sabha that India had more than 1.8 million registered EVs, with Uttar Pradesh accounting for nearly 23% of the total at 0.41 million.

Of the total EVs in the country, more than half, or 0.92 million, are three-wheelers used for commercial transport. This is followed by 0.8 million two-wheelers meant for personal use.

A recent study said that the adoption of zero-emission vehicles accelerated in 2022 across markets. It is estimated that 60% more EVs, totaling 10.6 million, will be sold globally in the current year compared to 2021.