China’s BYD has submitted an investment proposal worth $1 billion (nearly Rs 8,200 crore) to produce electric vehicles and batteries in India in partnership with a local company, three people with direct knowledge of the plan told Reuters.
BYD and privately held Hyderabad-based Megha Engineering and Infrastructures have submitted a proposal to Indian regulators to form an electric vehicle joint venture, people familiar with the matter said. The person requested anonymity because the application is private.
The long-term plan is to produce the entire range of BYD-branded electric vehicles in India, from hatchbacks to luxury models, one of three people familiar with the matter said.
BYD, the world’s largest maker of electric cars and plug-in hybrids, did not immediately respond to a request for comment. The company has previously said it plans to build a manufacturing plant in India, currently the world’s third-largest auto market.
India’s Commerce and Heavy Industries Ministry did not immediately respond to a request for comment.
BYD’s foray into India is part of its rapid global expansion to challenge Tesla, which still leads only in electric vehicle sales. If the Indian investment is approved, BYD will have access to all major global auto markets except the United States.
Tesla, which shelved plans to enter the Indian market last year after failing to reduce tariffs on imported cars in talks with Indian officials, recently restarted talks with the Indian government.
BYD has invested $200 million (nearly Rs 1,650 crore) in India to sell its Atto 3 electric SUV and e6 EV to corporate fleets and plans to launch its Seal luxury electric sedan this year.
The total production capacity proposed by BYD is currently unclear.
The maker of blade batteries and finished electric vehicles plans to expand production of electric vehicles in India to 100,000 vehicles per year within a few years, but may first ship auto parts to India for assembly while it works to build a supply chain, one of the sources said.
The investment proposal also includes plans by BYD and Megha Engineering to set up charging stations and build research and development and training centers in India, sources said.
The joint proposal comes amid tougher investment rules. Since 2020, India has stepped up its review of investments from neighboring countries, including China.
The controls forced China’s Great Wall Motors to shelve plans to invest $1 billion in the Indian market and forced MG Motor, a unit of China’s state-owned automaker SAIC Motor, to seek local partners.
Shenzhen-based BYD entered the Indian market in 2007 and produces batteries and components for mobile phone manufacturers.
In 2013, it began producing electric buses in partnership with Megha Engineering, part of a joint venture called Olectra Greentech.
BYD (which stands for “Build Your Dreams”) sold a total of 1.86 million pure electric vehicles and plug-in hybrid vehicles in 2022. In India, electric vehicles will account for just over 1% of total vehicle sales of 3.8 million units in 2022, but the government hopes to increase this to 30% by 2030.
In India, BYD will compete with domestic automaker Tata Motors and Chinese rival MG Motor, which currently dominate EV sales.
© Thomson Reuters 2023
