Recently there were news about Reliance Infrastructure launching two subsidiaries in electric vehicle sector. Reliance EV Pvt Ltd will be in the EV space with the goal to manufacture 2,50,000 EV a year and scale it up to 7,50,000 electric vehicles. The other subsidiary would venture into setting up 10GWH battery plant and scale it upto 75GWh eventually over a decade.
Reliance Infrastructure group is in the process of carrying out feasibility study for both the ventures- EV manufacturing and battery production. It has hired former senior executive of BYD India, Sanjay Gopalakrishnan as consultant for the EV project.
If we look at these verticals- EV manufacturing and Battery for EVs, both the industry vertical are fast evolving. Both have their own set of industry dominating players. While both the domains are evolving, it is quite unlikely that a new entrants would set foot in both the verticals. Moreover, Reliance Infrastructure is having its own set of challenges, including cash flows and high debt level etc. According to basic financial data available(Screener), Reliance Infrastructure has low return on equity over the last three years and poor sales growth over the last five years. And to top it up, the promoter’s equity is also low at 16.5%.
In this given situation, generating fund and venturing in both EV Manufacturing and battery production would be spreading thin. According to some industry experts, possibility of Anil Ambani group venturing into EV manufacturing is higher, as this would prevent them going head-on situation with elder brother Mukesh Ambani’s Reliance Industries. Reliance Industries at its Jamnagar facility is setting up capacity of 30GWh, and it will begin battery production in the second half of 2025.
