According to persons familiar with the situation, Reliance Industries Ltd. has halted plans to manufacture lithium-ion battery cells in India after failing to get Chinese technology. This illustrates how even the most powerful companies in the nation are having difficulty establishing an autonomous clean-energy supply chain.
Reliance pauses lithium-ion cell manufacturing plans
According to people who wished to remain anonymous because the information is confidential, the Mukesh Ambani-led oil-to-telecoms conglomerate, which had planned to start producing cells this year, had been in talks to license cell technology with Xiamen Hithium Energy Storage Technology Co., a Chinese supplier of lithium iron phosphate.
The Chinese business withdrew from the intended alliance amid Beijing’s restrictions on technology transfers abroad in important industries, which caused those discussions to stagnate, according to the sources. Reliance said that as a result of the setback, it is now concentrating on building battery energy storage systems, or BESS—containers for its own renewable power projects.
China technology curbs impact India’s clean energy ambitions
In an attempt to preserve its strategic advantages in some industries, China has increased its examination of clean-energy technology agreements, making it more difficult for international businesses to localize their products. Reliance’s difficulties demonstrate how businesses that are supposed to support Prime Minister Narendra Modi’s objective of making India carbon-zero by 2070 are unable to make significant headway in the absence of improved diplomatic relations with Beijing.
In an email answer, a Reliance representative said that the company’s intentions had not changed. The spokeswoman said in an email, “You will see that BESS production, battery pack manufacturing, and cell manufacturing have always been part of our energy storage goals and we are moving well in their implementation.”
Reliance clarifies stance on battery manufacturing roadmap
When asked about its connection to Xiamen Hithium, it remained silent. When asked for comment, Xiamen Hithium did not respond.
Reliance’s battery gigafactory will begin operations in 2026, Mukesh Ambani informed shareholders in August. The halt to the cell-making portion of Reliance’s bigger BESS plans does not immediately hurt the company’s bottom line since the majority of its income comes from consumer goods and oil refining, but it highlights the difficulties Ambani’s ambitious green energy goals face.
Ambani’s $10 billion green energy push
As part of a $10 billion investment effort to move away from the empire’s fossil fuel roots, the wealthiest person in Asia unveiled four gigafactories in 2021.
According to sources familiar with the talks, Reliance’s internal teams have determined that moving forward without access to tested Chinese cell technology would greatly increase costs and execution risks, especially because international markets are already struggling with excess battery capacity.
🔋 Reliance Battery Manufacturing Status
- Cell Manufacturing: Temporarily paused
- Reason: No access to Chinese LFP cell technology
- Focus Shift: Battery Energy Storage Systems (BESS)
- Gigafactory Timeline: Operations expected in 2026
- Impact: No immediate financial hit to Reliance
Cost challenges without Chinese battery technology
According to the individuals, other technologies from South Korea, Japan, and Europe were evaluated but found to be much more costly and less competitive for widespread implementation in India.
Conglomerates in India Inc. are racing to obtain battery storage capacity to serve rapidly growing renewable power portfolios, but they are still hindered by technological obstacles. Despite the recent political thaw between China and India, the obstacles to technology transfers persist since both countries must contend with high import tariffs from the United States.
⚡ India Energy Storage Sector Snapshot
- Key Players: Reliance, Adani Group, JSW Group
- Current Focus: Battery packs & BESS assembly
- PLI Incentives: Up to ₹181 billion in subsidies
- Major Hurdle: Cheap Chinese battery dominance
- 2035 Forecast: 87 GW energy storage capacity
Indian conglomerates adopt alternative battery strategies
According to those acquainted with their intentions, Adani Group and JSW Group, both of whom have outlined ambitious ambitions for clean energy development and are searching for lithium-ion cell technology, are concentrating on battery pack and container assembly rather than full-fledged cell manufacture.
A request for feedback on JSW Group’s ambitions in this industry was not immediately answered. India has long desired to increase its own production capacity for batteries.
PLI scheme and missed manufacturing deadlines
As part of an effort by New Delhi to reduce dependency on imported cells for electric cars, Reliance’s renewable energy division, Reliance New Energy, was one of three businesses that won bids to construct battery cell factories under a production-linked incentive scheme of the Indian government in 2022.
According to the persons, the manufacturers might get up to 181 billion rupees ($2 billion) in subsidies if they met project milestones that would have produced a total of 30 gigawatt-hours of advanced chemical cell capacity.
Within two years of signing the initiative, businesses had to reach a minimum committed production capacity and at least 25% local value addition; within five years, that number had to rise to 50%.
Policy incentives fall short amid cheap Chinese batteries
According to those acquainted with the situation, Reliance New Energy was punished under the program for missing deadlines, demonstrating that the present legislative incentives are insufficient to foster local production during a period when the globe is overrun with inexpensive Chinese batteries.
According to the individuals, Reliance has imported certain equipment for the fabrication of batteries and the construction of battery energy storage containers.
India’s energy storage expansion gains momentum
Lack of access to Chinese technology has hindered the production of cells, but ambitions to develop battery storage systems have instead increased across the industry. In November, Gautam Adani’s company announced that it will construct a multibillion-dollar battery energy storage system with a 1,126 megawatt power storage capacity in western India.
According to those acquainted with the events, the billionaire Sajjan Jindal-led JSW Group has started running a 30 megawatt battery energy storage project for captive usage at Vijayanagar in Karnataka, next to its steel production.
BloombergNEF projects that India’s energy storage industry will grow to around 87 gigawatts of electricity capacity by 2035, which is more than 300 times the amount built in 2024.
Frequently asked questions
1. What is the reason behind Reliance’s decision to stop producing lithium-ion cells?
Due to China’s prohibitions on knowledge transfers abroad, Reliance was unable to get licensed lithium iron phosphate (LFP) battery cell technology from a Chinese source, therefore it halted its plans.
2. With which Chinese business was Reliance negotiating?
Reliance had conversations with a Chinese manufacturer of LFP battery cells, Xiamen Hithium Energy Storage Technology Co., but those discussions ended.
3. Is Reliance completely pulling out of the battery industry?
No, Reliance is maintaining long-term ambitions for cell manufacture while concentrating on the assembly of battery packs and Battery Energy Storage Systems (BESS).
4. Does Reliance’s financial performance suffer as a result of this delay?
Not right away. The majority of Reliance’s income comes from consumer goods, communications, and oil refining, therefore the halt has no immediate financial effects.
5. Do other Indian conglomerates have comparable difficulties?
Indeed. Due to challenges in obtaining cheap lithium-ion cell technology, companies such as Adani and JSW are also giving priority to battery pack and container assembly.
Conclusion
Reliance’s decision to halt production of lithium-ion cells underscores India’s larger battle to develop a sustainable energy supply chain that is independent without recourse to cheap Chinese technology. The setback highlights the technical and geopolitical challenges confronting India’s ambitious renewable energy and carbon-neutral aspirations, even if the business is still moving forward with battery storage solutions.
Disclaimer
This news article is for informational purposes only and is based on publicly available reports. It does not constitute financial, investment, or legal advice.
