Reliance Infrastructure Enters the Electric Vehicle Market
Reliance Infrastructure, led by Anil Ambani, is reportedly preparing to enter the electric vehicle (EV) market, potentially setting the stage for a direct competition with his brother Mukesh Ambani's Reliance Industries. This move signifies a significant shift for Reliance Infrastructure, which has been facing financial challenges in recent years.
According to a Reuters report, Reliance Infrastructure has hired former BYD executive Sanjay Gopalakrishnan as a consultant to advise on its plans to manufacture electric cars and batteries. The company is conducting a feasibility study for building an EV plant with an initial capacity of 250,000 vehicles per year, with the potential to scale up to 750,000. Additionally, they are exploring the feasibility of setting up a battery manufacturing plant with an initial capacity of 10 GWh, expanding to 75 GWh over the next decade.
While Reliance Infrastructure has not officially commented on the report, shares of the company rose by nearly 2% following the news. This potential entry into the EV market could position Anil Ambani's firm in direct competition with Mukesh Ambani's Reliance Industries, which is already involved in 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 total car sales. However, the government aims to increase this to 30% by 2030, offering over $5 billion in incentives for local EV and battery manufacturing. This presents a promising opportunity for Reliance Infrastructure, alongside other major auto players like Tata Motors, Maruti Suzuki, and Hyundai.
Reliance Infrastructure has also formed two new subsidiaries, including Reliance EV Private Ltd, with the objective of manufacturing and dealing in vehicles and components. The company is actively seeking partners, including Chinese firms, to finalize its EV plans in the coming months.
The foray into electric vehicles comes at a time when Reliance Infrastructure has been grappling with financial challenges, including high debt and cash flow issues. It remains unclear how the company plans to fund the ambitious EV project. However, with a former BYD executive on board and the potential to tap into government incentives, Anil Ambani could be positioning his company for a major comeback in the rapidly growing EV space.