Reliance’s EV Battery Dream Hits a Snag

A Deadline Missed

Reliance won a spot in India’s Production-Linked Incentive (PLI) scheme back in March 2022. The deal? Build a 5-gigawatt (GW) battery plant in two years. That clock ran out this month, and the plant isn’t ready. The Ministry of Heavy Industries slapped a penalty of Rs 31 million ($355,293) on Reliance New Energy Battery Storage Ltd., a subsidiary handling the project. Now, the company wants an extension—though it’s not saying how long or why it’s late.

The PLI scheme is a big deal for India. It’s meant to spark local production of advanced chemistry cells (ACCs), the guts of EV batteries. With $2.07 billion on the table, the government wants 30% of car sales to be electric by 2030. Right now, EVs are just 2% of the market. Reliance’s delay could slow that goal, but it’s not alone—other firms like Ola Electric also snagged PLI funds.

Why the Holdup Matters

This isn’t just about one plant. Reliance is betting big on green energy. Its Jamnagar, Gujarat, gigafactory aims to churn out 30 gigawatt-hours (GWh) of batteries yearly by late 2026. The plan starts with assembling battery storage systems for homes, businesses, and utilities. Later, it’ll make cells and chemicals from scratch. The company’s already sunk Rs 75,000 crore ($9 billion) into this vision, eyeing a net-zero carbon goal by 2035.

But hiccups hurt. The penalty stings less than the hit to momentum. “Delays like this test investor trust,” said Rhea Patel, an energy analyst at Mumbai’s GreenFuture Consulting. “Reliance needs to show it can deliver on big promises.” Posts on X echo that—some users call it a stumble for India’s EV hopes, while others see it as a smart pause to get things right.

Background adds spice. Reliance bought battery tech firms like Lithium Werks (U.S.) and Faradion (U.K.) for $200 million total in 2021-2022. It’s got the know-how—lithium-iron-phosphate and sodium-ion cells—but turning that into a working plant is tough. Supply chains, land issues, or tech tweaks could be the snag, though the company’s tight-lipped.

What’s at Stake

India’s EV dream rides on batteries. Imports from China dominate now, and local plants could slash costs and boost jobs. Reliance’s 5 GW plant is just step one—it’s cleared to bid for 10 GW more under PLI. Success could make it a global player, not just an oil giant. Failure? That risks ceding ground to rivals like Tata or Adani.

The government’s watching, too. It’s poured cash into PLI to hit that 30% EV target. A Reliance slip-up might spook other firms—or force a rethink of deadlines. Meanwhile, the rupee’s steady at 87.31 to the dollar, but foreign investors want results. The plant’s modular design, expandable to 20 GW fast, keeps hope alive—if it gets off the ground.

Next Steps and Big Questions

Reliance isn’t waving a white flag. It’s asked for more time to hit “Milestone 1”—likely the plant’s basic setup. The Ministry of Heavy Industries will decide soon. If approved, expect a new timeline by April. If not, bigger penalties or a lost PLI slot could loom. Either way, Reliance vows to start battery pack production by late 2025, scaling to 30 GWh by 2026.

What’s the ripple effect? A strong Reliance could spark an EV boom—cheaper batteries, more electric cars, less pollution. But delays might chill investment or push India back to imports. The stakes are high, and all eyes are on Jamnagar. Can Ambani’s crew pull it off? The next few months will tell.

References

• Reuters: India’s Reliance Industries seeks extension for EV battery plant setup
• The Economic Times: Reliance Industries seeks extension for EV battery plant setup
• Business Standard: Reliance Industries seeks extension for EV battery-making plant setup
• Energy-Storage.News: India’s Reliance Industries on track with solar PV, battery storage gigafactory plans