Reliance Pauses Battery Cell Plans After China Tech Setback
The Mukesh Ambani-led group had aimed to begin cell manufacturing this year and was in talks with Xiamen Hithium Energy Storage Technology Co to license lithium iron phosphate cell technology. However, the discussions stalled after the Chinese company withdrew amid Beijing’s tighter curbs on overseas technology transfers in strategic sectors.
Following the setback, Reliance has refocused on assembling battery energy storage systems for its renewable power projects, the people said. China has increased scrutiny of clean-energy technology deals to protect its strategic advantage, complicating localisation efforts for foreign manufacturers. The development highlights the hurdles facing Indian companies expected to support Prime Minister Narendra Modi’s target of making India carbon neutral by 2070.
A Reliance spokesperson said there has been no change in the company’s broader plans, noting that battery energy storage systems, battery packs and cell manufacturing have always been part of its energy storage strategy and that execution is progressing. The company did not comment on its engagement with Xiamen Hithium, which did not respond to requests for comment.
In August 2025, Mukesh Ambani told shareholders that Reliance’s battery gigafactory would start operations in 2026. While the pause in cell manufacturing does not pose an immediate financial impact, given the group’s core revenues from oil refining and consumer businesses, it highlights the execution risks in its green energy ambitions. In 2021, Ambani had announced plans to set up four gigafactories as part of a USD 10 billion investment push to transition away from fossil fuels.
Reliance’s internal assessments concluded that proceeding without proven Chinese cell technology would significantly increase costs and execution risks, particularly amid global oversupply of batteries. Alternatives from Japan, Europe and South Korea were evaluated but found to be substantially more expensive and less competitive for large-scale deployment in India.
Similar challenges are being seen across corporate India as conglomerates race to secure battery capacity to support rapidly expanding renewable power businesses. Despite a recent diplomatic thaw between India and China, technology transfer bottlenecks persist. Other major groups such as Adani Group and JSW Group are also prioritising battery pack and container assembly over full-scale cell manufacturing, according to people familiar with their strategies.
India has long sought to build domestic battery manufacturing capacity. In 2022, Reliance’s renewable energy arm, Reliance New Energy, was among three companies selected under the government’s production-linked incentive scheme for advanced chemistry cell manufacturing. The programme offered subsidies of up to Rs 181 billion linked to milestones for creating 30 gigawatt-hours of capacity.
Under the scheme, companies were required to achieve minimum committed capacity and at least 25 per cent local value addition within two years, rising to 50 per cent within five years. Reliance New Energy was penalised earlier this year for missing deadlines, indicating that current incentives may be insufficient at a time when global markets are flooded with low-cost Chinese batteries.
With cell manufacturing constrained by technology access, battery energy storage system projects are gaining momentum. In November, Adani Group announced plans to build a multi-billion-rupee battery storage project in western India with a proposed capacity of 1,126 MW. JSW Group has also begun operating a 30 MW battery storage pilot at Vijayanagar in Karnataka for captive use.
According to estimates by BloombergNEF, India’s energy storage market is expected to reach around 87 GW by 2035, more than 300 times the capacity installed in 2024.