Reliance discusses battery components supply with CATL

Reliance Industries, an Indian conglomerate, is in talks with China’s CATL and other suppliers to buy parts for battery energy storage systems for its Jamnagar plant in Gujarat, as it adjusts its renewable energy plans to tighter Chinese curbs on battery technology exports.

The talks could give Reliance a second source of components after delays in its partnership with Xiamen Hithium, and follow the collapse of earlier discussions with CATL on a lithium-ion cell technology transfer. No deal is certain.

Reliance said it evaluates opportunities on an ongoing basis and will make stock exchange disclosures when needed, while BloombergNEF projected India’s energy storage market will reach 336.7 GWh by 2035.

🔗 Source: Bloomberg

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Implications, context, and why it matters.

Reliance’s battery plan faces government deadlines and penalties

India’s Production Linked Incentive (PLI) scheme gives financial support for local manufacturing and required selected companies to set up plants within two years of signing their contracts 1.
In March 2022, Reliance secured incentives to build 5 gigawatt-hours (GWh) of advanced chemistry cell (ACC) manufacturing capacity 1.
India’s Ministry of Heavy Industries sent a notice to Reliance New Energy Battery Storage Ltd, a subsidiary of Reliance Industries, after it missed its first milestone. The company has asked for more time 1.
The missed target also triggered liquidated damages. A daily penalty of 0.1% applies to its 5 billion rupees (US$60.7 million) performance security from January 1, 2025 1.

Reliance’s strategy seeks to cut supply chain risk

Reliance New Energy is building a green energy manufacturing complex in Jamnagar, Gujarat 2. Planned facilities cover solar photovoltaic (PV) equipment; battery cells plus storage systems; electrolysers; raw and auxiliary materials; power electronics; semiconductor production; plus a research and development (R&D) center 2.
Reliance has said it wants end-to-end manufacturing, including an integrated quartz-to-module chain in solar PV, which means production from raw quartz through finished solar modules. It says this would support energy security plus decarbonisation goals, including its net-zero target by 2035 3.
Instead of relying only on licensed technology, Reliance has used Reliance New Energy Ltd. (RNEL) to buy Faradion Ltd., a UK battery technology company 3. It also bought assets of Lithium Werks, a battery manufacturer, among other deals 3.
Reliance says this buy-and-build model fits its goal of helping India move from a net energy importer to a net energy exporter through domestic technology ownership plus manufacturing capacity 3.