Reliance Halts Cell-Making Plans After Failed Bid for China Tech

Narendra Modi, left, and Mukesh Ambani in New Delhi in 2022. Photo by Prakash Singh /Photographer: Prakash Singh/Bloo

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(Bloomberg) — Reliance Industries Ltd. has paused plans to make lithium-ion battery cells in India after failing to secure Chinese technology, said people familiar with the matter, reflecting how even the country’s most powerful businesses are struggling to build out an independent clean-energy supply chain.

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The Mukesh Ambani-led oil-to-telecoms conglomerate, which had aimed to begin cell manufacturing this year, had been in discussions with a Chinese lithium iron phosphate supplier Xiamen Hithium Energy Storage Technology Co. to license cell technology, according to the people who did not want to be identified as the information is not public.

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Those talks stalled after the Chinese company withdrew from the proposed partnership amid Beijing’s curbs on overseas technology transfers in key sectors, the people said. The setback has prompted Reliance to refocus on assembling battery energy storage systems, or BESS — containers for its own renewable power projects, they added.

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China has stepped up scrutiny of clean-energy technology deals as it seeks to protect strategic advantages in sectors, complicating localization efforts by foreign manufacturers. 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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A Reliance spokesperson said there’s no change in the company’s plans in an emailed response. “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 in an email.

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

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In August, Mukesh Ambani told shareholders that Reliance’s battery gigafactory will start in 2026. While the pause in the cell-making part of Reliance’s larger BESS plans doesn’t deal any immediate financial blow — the giant earns bulk of its revenue from oil refining and consumer businesses — it underscores the challenges for Ambani’s sweeping green energy ambitions. 

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

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

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

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The pattern is mirrored across India Inc. as conglomerates race to secure battery storage capacity to support rapidly expanding renewable power portfolios, but remain stymied by technology bottlenecks. The hurdles to technology transfers continue despite the recent diplomatic thaw between India and China as both nations deal with hefty US import tariffs.