Reliance Giga factories to support supply chain of EV’s, in line with govt’s electrification push

The 44th AGM of Reliance Industries Limited(RIL) last week saw several big-ticket announcements by its chairman Mukesh Ambani. A significant move pertaining to renewable energy and electric mobility was the decision to build 4 Giga factories that would manufacture energy storage batteries, electrolysers, hydrogen fuel cells and solar photovoltaic modules. These factories would form a part of the Dhirubhai Ambani green energy Giga complex spread of 5,000 acres of land in Jamnagar, Gujarat.

Of these, the manufacturing of energy storage batteries and fuel cells would provide a boost to the Modi government’s plan to promote the use of electric vehicles during the next decade.

Since the spread of coronavirus last year, governments around the world, including in India, are trying to realign their supply chains away from China which currently holds the title of the ‘factory of the world’. Increasing tensions with China over the LAC have only hastened the government’s efforts towards ensuring self-sufficiency in several critical sectors. While India is a big hub of automobile manufacturing, the companies depend on China for the supply of components like lithium-ion batteries and electric motors.

Thus the government intends to create a reliable supply chain for electric vehicles within the country which would serve twin objectives- reducing the cost of EVs in the long run while ensuring self-sufficiency and even exports in the sector. Lowering the costs of EVs would ensure faster adoption in line with the government’s target to combat climate change through increased electric mobility.

According to a report by Motilal Oswal, the prices of lithium batteries can go below $70/Kwh in the next 4 to 5 years due to government incentives. The Centre has already launched a Production Linked Incentive scheme with a budgeted amount of Rs 18,000 crore to promote manufacturing in the sector.

Mukesh Ambani announced at the AGM that RIL would spend Rs 60,000 crore for the 4 Giga factories in addition to investing Rs 15,000 crore towards developing partnerships, value chain and futuristic technologies.