Reliance halts cell-making plans after failed bid for China tech

[DELHI] Reliance Industries has paused plans to make lithium-ion battery cells in India after failing to secure Chinese technology, said people familiar with the matter.

This reflects how even the country’s most powerful businesses are struggling to develop an independent clean-energy supply chain.

The Mukesh Ambani-led oil-to-telecommunications conglomerate aimed to begin cell manufacturing this year.

It had been in discussions with a Chinese lithium iron phosphate supplier Xiamen Hithium Energy Storage Technology to license cell technology, indicated sources who want to remain anonymous as the information is not public.

Those talks stalled after the Chinese company withdrew from the proposed partnership, amid Beijing’s curbs on overseas technology transfers in key sectors, the sources noted.

They added that the setback has prompted Reliance to refocus on assembling battery energy storage systems (BESS), which are containers for its own renewable power projects.

A Reliance spokesperson denied that there has been any change in the company’s renewable energy plans, which include a battery gigafactory that it previously said would start operating in 2026. 

The spokesperson added: “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.”

Reliance’s struggles reflect how the companies expected to help Prime Minister Narendra Modi’s goal to make India carbon-zero by 2070 cannot log substantial progress, without better bilateral ties with Beijing.

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Reliance did not respond to questions on its relationship with Xiamen Hithium. Xiamen Hithium did not reply to a request for comment.

While the pause in the cell-making part of Reliance’s larger plans does not deal any immediate financial blow, it underscores the challenges for the tycoon’s sweeping green-energy ambitions.

The company earns the bulk of its revenue from oil refining and consumer businesses.

Ambani, the richest person in Asia, had announced four gigafactories in 2021, as part of a US$10 billion investment push to pivot away from the empire’s fossil-fuel origins.

The company’s shares slipped as much as 1.3 per cent during trading in Mumbai on Monday (Jan 12), pushing this year’s decline to almost 7 per cent.

Reliance’s internal teams have concluded that proceeding without access to proven Chinese cell technology would significantly raise costs and execution risks, particularly as the global markets are already grappling with excess battery capacity, said sources.

Alternative technologies from Japan, Europe and South Korea were assessed, but deemed substantially more expensive and less competitive for large-scale deployment in India, they added.

The pattern is mirrored across India’s government and corporate sectors, as conglomerates race to secure battery capacity to support rapidly expanding renewable-power businesses, but remain hindered by technology bottlenecks.

The hurdles to technology transfers continue despite the recent diplomatic thaw between India and China, as both nations deal with US President Donald Trump’s volatile foreign policy.

The other powerful Indian conglomerates with ambitious clean-energy plans, such as the Adani Group and JSW Group, are also focusing on battery pack and container assembly rather than full-fledged cell manufacturing, indicated other sources familiar with their strategies.

JSW Group did not immediately respond to a request for comments on its plans in this sector.

Incentive programme

India has long wanted to build up its own battery manufacturing capacity.

In 2022, Reliance’s renewable energy unit, Reliance New Energy, was one of the three companies that won bids to build battery cell plants under a production-linked incentive programme of the Indian government.

It was part of a push by New Delhi to cut reliance on imported cells for electric vehicles.

The manufacturers were eligible for as much as 181 billion rupees (S$2.6 billion) in subsidies tied to meeting project milestones, aimed at creating a cumulative 30 gigawatt (GW)-hours of advanced chemistry cell capacity, the sources said.

Under the initiative, the companies were required to achieve a minimum committed manufacturing capacity, and at least a 25 per cent local value addition within two years of signing the agreement, rising to 50 per cent within five years.

In March 2025, Reliance New Energy was penalised for missing deadlines under the programme, the sources added, showing that the current policy incentives are far from enough to create local manufacturing, at a time when the world is awash in cheap Chinese batteries. 

Reliance has imported some machinery for both battery energy storage container assembly and cell production, the sources noted.

With cell-making hindered by a lack of access to Chinese technology, plans to build battery storage systems instead have accelerated across the sector.

Gautam Adani’s group said in November that it would build a multi-billion-dollar battery energy storage system in western India, with a proposed power storage capacity of 1,126 megawatts (MW).

The billionaire Sajjan Jindal-led JSW Group, meanwhile, has begun operating a 30-MW battery energy storage pilot at Vijayanagar in Karnataka, adjacent to its steel plant, for captive use, indicated sources familiar with the developments.

By 2035, India’s energy storage market is expected to reach about 87 GW of power capacity – more than 300 times what was installed in 2024, indicated BloombergNEF estimates. BLOOMBERG