BYD, the world’s largest producer of electric vehicles (EVs) and plug-in hybrids, has presented a $1 billion investment proposal to establish a manufacturing presence in India. According to three anonymous sources familiar with the plan, BYD has partnered with Hyderabad-based Megha Engineering and Infrastructures to submit a joint proposal for an EV joint venture to Indian regulators. The proposal aims to manufacture a comprehensive range of BYD-brand electric cars in India, starting from hatchbacks and extending to luxury models.
Although BYD has not yet commented on the investment proposal, the company has previously expressed its intention to set up manufacturing operations in India, which currently ranks as the world’s third-largest car market. The commerce and heavy industries ministries of India have yet to provide an official response regarding the proposal.
BYD’s strategic move into India aligns with its global expansion plans and represents a challenge to Tesla, the current leader in EV sales. If approved, the investment would enable BYD to establish a presence in all major car markets worldwide, with the exception of the United States. In recent developments, Tesla has resumed discussions with the Indian government after suspending plans to enter the market last year due to unsuccessful negotiations for lower tax duties on imported vehicles.
Already investing $200 million in India, BYD currently sells the Atto 3 electric SUV and the e6 EV to corporate fleets. The company plans to launch its luxury electric sedan, the Seal, later this year. The precise production capacity proposed by BYD remains undisclosed at this time. However, sources indicate that BYD plans to scale up production to 100,000 EVs annually in India within a few years. Initially, the company may ship vehicles in parts for assembly while simultaneously developing a robust supply chain.
Beyond vehicle manufacturing, BYD’s investment proposal also encompasses plans to establish charging stations, research and development centers, and training facilities in India. This joint proposal between BYD and Megha Engineering comes amidst stricter investment regulations in India, particularly regarding investments from neighboring countries such as China. These regulations previously prompted Great Wall Motor and SAIC’s MG Motor unit to reconsider their investment plans in the Indian market.
Having initially entered the Indian market in 2007 as a supplier of batteries and components to mobile phone manufacturers, BYD later ventured into electric bus production in partnership with Megha Engineering under the joint venture company Olectra Greentech. In 2022, BYD achieved sales of 1.86 million BEVs and plug-in hybrids globally. In India, however, EVs constituted just over 1% of the total car sales of 3.8 million in 2022. Nevertheless, the Indian government aims to increase this percentage to 30% by 2030. In India’s electric car market, BYD will face competition from domestic automaker Tata Motors and Chinese rival MG Motor, which currently dominate the sales of electric vehicles.
