Reliance Industries Halts Lithium-Ion Battery Cell Manufacturing Plans After Chinese Tech Deal Collapse

Reliance Industries Ltd. has suspended plans to manufacture lithium-ion battery cells in India after unsuccessful attempts to secure Chinese technology, according to people familiar with the matter, highlighting how even the country's most influential corporations face obstacles in establishing an independent clean-energy supply chain, news agency Bloomberg has reported.

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.

Chinese Partner Withdraws

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.

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.

Company Maintains Commitment

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.

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

Gigafactory Timeline Remains Uncertain

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.

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.

Cost and Risk Assessment Drives Strategic Shift

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.

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.

Industry-Wide Challenges for Indian Conglomerates

Adani Group and JSW Group -- both have laid out aggressive clean-energy expansion plans and are scouting for lithium-ion cell technologies — are also focusing on battery pack and container assembly rather than full-fledged cell manufacturing, according to other people familiar with their strategies.

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

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