By Lewis Jackson and Aditi Shah
BEIJING/NEW DELHI (Reuters) -Indian billionaire Mukesh Ambani’s Reliance Industries is rushing to get its orders of battery components out of China ahead of new export curbs, two people briefed on the matter said, as concerns mount worldwide about how Beijing intends to enforce its widening export control regime.
A team from Reliance has travelled to China to speed up the work, one of the sources said.
Reliance and China’s Ministry of Commerce did not respond to a request for comment. The people declined to be named due to the sensitivity of the situation.
Chinese companies are world leaders in electric battery technology and to maintain that competitive edge Beijing introduced new rules this month requiring companies to seek permission before exporting battery supply chain equipment. The new curbs take effect on Nov. 8.
At least a dozen other foreign customers of the Chinese battery sector are in a similar situation to Reliance, said the second source, who said some were foregoing quality assurance or other final stages of manufacturing to get goods shipped more quickly.
“Who cares if it hasn’t been painted yet or the screws haven’t been checked,” the second source said. “They are saying we’ll do the testing once it lands, just get it out the door.”
CHINA HAS MAJOR ROLE IN BATTERY SUPPLY CHAIN
Without the Chinese gear, Reliance cannot fulfill its plan to locally assemble or produce batteries to store energy from its mega solar power project being championed by the Indian government to cut dependence on fossil fuels, the person added.
China’s battery makers account for six out of the top ten players globally, according to consultancy SNE Research. The people did not say which Chinese companies supplied Reliance.
CATL, China’s largest battery maker, said in a statement to Reuters it was confident exports to its factories overseas would proceed smoothly under the new export regime.
“The export of equipment and materials needed for our plants in Europe is progressing as planned,” it said.
China exported $48 billion worth of batteries in the first eight months of this year, up 26% compared to the same period last year, according to Chinese customs data.
China’s battery export action adds to concerns about the risk of being dependent on Beijing for key technologies that can become caught up in trade conflicts.
China’s export controls on rare earths have highlighted the risks of being dependent on one supplier. The curbs, introduced in April, led to shortages that threatened to cripple car production around the world.
Chinese battery makers are reassuring foreign customers that nothing so drastic is likely to happen for batteries and export licences should be granted quickly and widely within a few months of the new regime starting, the second source said.
But in the meantime foreign companies have to play a waiting game.
“It is a very tense situation,” said the first source.
(Reporting by Lewis Jackson in Beijing and Aditi Shah in Delhi; additional reporting by Zhang Yan in Beijing; Editing by Brenda Goh and Jane Merriman)
