Panasonic Group will form a joint venture with Indian Oil Corporation Ltd (IOCL), the nation’s biggest oil firm, to manufacture cylindrical lithium-ion batteries.

Panasonic Energy Co Ltd, a group firm of Japan-based multinational electronics company, has signed a binding term sheet and initiated discussions with IOCL “to draw a framework for the formation of a joint venture” to manufacture cylindrical lithium-ion batteries, said a statement on Sunday.

“This initiative is driven by the anticipated expansion of demand for batteries for two- and three-wheel vehicles and energy storage systems in the Indian market,” it added.

Cylindrical lithium-ion batteries are commonly used in consumer electronics, power tools and electric vehicles. Panasonic Energy is a maker of automotive lithium-ion batteries.

The two companies are engaging in a feasibility study regarding the utilisation of battery technology to facilitate the transition to clean energy in India, the statement said.

The companies are aiming for “finalising details of their collaboration by the summer of this year”, it added.

State-owned IOCL is aiming to achieve net-zero carbon emissions by 2046, aligning with the Indian government’s plan to achieve net-zero for the country as a whole by 2070.

“Through its partnership with IndianOil, Panasonic Energy aims to address environmental challenges, such as reducing CO2 emissions, as well as to contribute to establishing a complete supply chain ecosystem for improving India’s self-reliance and fortifying India’s position in the global energy landscape,” it said.

This will also lead to the growth of India’s battery industry by enhancing cell technology and creating domestic demand for raw materials and new entrants.

“Leveraging its expertise in battery development and manufacturing, Panasonic Energy strives to contribute to the growth of the lithium-ion battery industry and India’s energy transition, while pursuing its mission of helping to build a sustainable society,” it said.

Established in April 2022, Panasonic Energy provides battery technology-based products and solutions.

Through its automotive lithium-ion batteries, storage battery systems and dry batteries, the company provides solutions to a broad range of business areas, from mobility and social infrastructure to medical and consumer products.