Reliance puts lithium-ion battery cell manufacturing plans on hold
What's the story
Reliance Industries Ltd., India's leading conglomerate, has put its lithium-ion battery cell manufacturing plans on hold. The decision comes after the company's unsuccessful attempt to secure critical technology from China. The Mukesh Ambani-led company had hoped to start cell production this year and was in talks with Chinese supplier Xiamen Hithium Energy Storage Technology Co. for a technology licensing agreement.
Setback details
Chinese company's withdrawal stalls technology transfer talks
The negotiations with Xiamen Hithium Energy Storage Technology Co. have hit a roadblock after the Chinese company withdrew from the proposed partnership. The withdrawal is said to be due to Beijing's restrictions on overseas technology transfers in strategic sectors. This setback has forced Reliance to shift its focus toward assembling battery energy storage systems (BESS) for its own renewable power projects.
Company statement
Reliance's response and future plans
In an email response to The Economic Times, a Reliance spokesperson said there is no change in the company's plans. "You will note that BESS manufacturing, battery pack manufacturing and cell manufacturing have always been part of our energy storage plans and we are progressing well in their execution," the spokesperson said. However, they did not comment on their relationship with Xiamen Hithium.
Cost concerns
Internal assessment and alternative technology costs
Reliance's internal teams have assessed that going ahead without proven Chinese cell technology would dramatically increase costs and execution risks. This is especially true as global markets are already dealing with overcapacity in batteries. Alternative technologies from Japan, Europe, and South Korea were evaluated but found to be significantly more expensive and less competitive for large-scale deployment in India.
Industry impact
Other Indian conglomerates face similar technology transfer challenges
The challenges faced by Reliance are also being experienced by other Indian conglomerates. Adani Group and JSW Group, both of which have aggressive clean-energy expansion plans, are focusing on battery pack and container assembly instead of full-fledged cell manufacturing. This is due to the same technology bottlenecks that Reliance has encountered in its quest for lithium-ion cell technologies.
Market growth
India's battery storage market projected to grow significantly
Despite these challenges, India's energy storage market is expected to grow exponentially. By 2035, the market is projected to reach around 87GW of power capacity, over 300 times what was installed in 2024, according to BloombergNEF estimates. This growth shows the potential for future advancements in battery technology and energy storage solutions in India.