BYD, a Chinese company known for being the world’s largest producer of electric vehicles (EVs) and plug-in hybrid vehicles, has put forward a proposal to invest $1 billion in India for the purpose of manufacturing EVs and batteries.
According to three individuals familiar with the plan who spoke to Reuters on the condition of anonymity, BYD has partnered with Megha Engineering and Infrastructures, a privately held company based in Hyderabad, to submit the proposal for the establishment of an EV joint venture in India. The long-term objective of this venture is to manufacture a comprehensive range of BYD-branded electric cars in India, spanning from hatchbacks to luxury models.
At present, BYD has not responded to requests for comment regarding this investment proposal. However, the company has previously expressed its intentions to establish manufacturing facilities in India, which is currently the world’s third-largest automobile market. BYD’s expansion into India is part of its broader global strategy to compete with Tesla, the current leader in EV sales. If approved, this investment would allow BYD to have a presence in all major global car markets, except the United States.
It is worth noting that Tesla has recently resumed discussions with the Indian government after shelving its plans to enter the market last year due to unsuccessful negotiations for lower tax duties on imported vehicles. Meanwhile, BYD has already invested $200 million in India, where it currently sells the Atto 3 electric SUV and the e6 EV to corporate fleets.
BYD plans to introduce its Seal luxury electric sedan in India later this year.
The exact production capacity proposed by BYD in India is not immediately clear. However, the company aims to gradually increase production to reach 100,000 EVs annually within a few years. Initially, BYD may ship vehicle components for assembly in India as it works on building a local supply chain. Alongside manufacturing, the investment proposal includes plans for setting up charging stations, establishing research and development centers, and training facilities.
The joint proposal by BYD and Megha Engineering comes amidst stricter investment regulations. Since 2020, India has imposed stricter scrutiny on investments from neighboring countries, including China. These regulations previously led Great Wall Motor from China to abandon its $1 billion investment plan in India and prompted the MG Motor unit of Chinese state-owned automaker SAIC to seek a local partner.
BYD entered the Indian market in 2007 by producing batteries and components for mobile phone manufacturers. In 2013, the company formed a joint venture called Olectra Greentech with Megha Engineering, focusing on building electric buses. In 2022, BYD sold a total of 1.86 million EVs and plug-in hybrids worldwide. In India, EVs accounted for just over 1% of the total car sales of 3.8 million in 2022.
The Indian government has set a target to increase the share of EVs to 30% of total car sales by 2030. In India, BYD will face competition from domestic automaker Tata Motors and Chinese rival MG Motor, which currently dominate the electric car market.
