Reliance pauses lithium-ion cell manufacturing plans in India after China technology talks stall

Reliance Industries paused plans to manufacture lithium-ion battery cells in India after failing to secure Chinese cell technology and shifted focus to assembling battery energy storage systems for its renewable projects.
Reliance pauses lithium-ion cell manufacturing plans in India after China technology talks stall
A What happened
Reliance Industries paused plans to make lithium-ion battery cells in India after talks to license technology from Xiamen Hithium Energy Storage Technology Co. stalled. People familiar with the matter said the Chinese company withdrew from the proposed partnership under Beijing’s curbs on overseas technology transfers in key sectors. The setback prompted Reliance to refocus on assembling battery energy storage systems for its renewable power projects. People familiar with the discussions said Reliance teams concluded that proceeding without proven Chinese cell technology would significantly raise costs and execution risks, and that alternatives from Japan, Europe, and South Korea were assessed but deemed more expensive and less competitive for large-scale deployment in India.

Key insights

  • 1

    China technology-transfer curbs complicate localization efforts: China has stepped up scrutiny of clean-energy technology deals and imposed curbs on overseas technology transfers in key sectors, complicating localization efforts by foreign manufacturers.

  • 2

    Policy incentives cited as insufficient for local cell manufacturing: People familiar with the matter said Reliance New Energy was penalized for missing deadlines under India’s production-linked incentive program, and said current policy incentives are far from enough to create local manufacturing while cheap Chinese batteries are widely available.

  • 3

    Sector shift toward BESS assembly: People familiar with the matter said a lack of access to Chinese cell technology has accelerated plans across the sector to build battery energy storage systems instead of full-fledged cell manufacturing.

Takeaways

Reliance and other Indian conglomerates are prioritizing battery energy storage system assembly while access to Chinese lithium-ion cell technology remains constrained.

Topics

World & Politics Policy & Regulation Climate & Environment Energy Transition

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