Anil Ambani's Reliance Infrastructure plans to enter the electric vehicle market, potentially competing with Mukesh Ambani's Reliance Industries.
Anil Ambani's Reliance Infrastructure is reportedly preparing to challenge his brother Mukesh Ambani by entering the electric vehicle (EV) market. According to a report by Reuters, the company has hired Sanjay Gopalakrishnan, a former executive from BYD, as a consultant to help guide its plans for manufacturing electric cars and batteries. This move sets the stage for a potential rivalry between the two Ambani brothers in one of India’s most rapidly growing sectors.
Reliance Infrastructure is currently conducting a cost feasibility study to explore building an EV plant with an initial production capacity of 250,000 vehicles per year. The company aims to eventually scale this up to 750,000 vehicles annually. In addition to car manufacturing, Reliance Infrastructure is also considering setting up a battery manufacturing plant. The plan is to start with a capacity of 10 GWh and expand it to 75 GWh over the next decade, according to sources who spoke to Reuters.
Although the company has not officially commented on these reports, and the information has not been independently verified, the news has already had an impact. After Reuters reported the developments, shares of Reliance Infrastructure saw a nearly 2% increase.
If the project goes ahead, it could put Anil Ambani's company in direct competition with Mukesh Ambani's Reliance Industries, which is already making strides in the EV market. Mukesh's company is working on local battery manufacturing and has secured government incentives for 10 GWh of battery cell production.
India’s EV market is still in its early stages, with electric vehicles currently making up less than 2% of the 4.2 million cars sold in the country last year. However, the Indian government has set ambitious goals, aiming for 30% of cars to be electric by 2030. To support this transition, the government is offering over $5 billion in incentives for local manufacturing of EVs and batteries. This has attracted interest from major players like Tata Motors, Maruti Suzuki, and Hyundai, creating a promising opportunity for companies like Reliance Infrastructure to enter the market.
To support its foray into the EV space, Reliance Infrastructure has formed two new subsidiaries, including Reliance EV Private Ltd. These subsidiaries will focus on manufacturing and dealing in vehicles and components. The company is also actively seeking partners, including Chinese firms, to help finalise its EV plans in the coming months.
This move into electric vehicles comes at a challenging time for Reliance Infrastructure, as the company has been dealing with financial difficulties, including high levels of debt and cash flow issues. It remains unclear how the company plans to fund such an ambitious EV project. However, with the expertise of a former BYD executive on board and the potential to benefit from government incentives, Anil Ambani may be positioning his company for a significant comeback in the rapidly expanding EV sector.
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