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BYD Plans $1 Billion Investment for Electric Cars and Batteries in India
Updated: Jan 8
China's BYD Co and Megha Engineering propose $1 billion investment in India to establish a joint venture for electric vehicles, including the production of a full range of BYD-brand cars.
The move seeks to expand BYD's global presence and compete with Tesla, positioning it in major car markets worldwide.
China's BYD Co has presented a $1 billion investment proposal to construct electric cars and batteries in India, in collaboration with a local company, according to sources familiar with the matter. BYD and privately held Megha Engineering and Infrastructures from Hyderabad have submitted an application to Indian regulators for the formation of an electric vehicle (EV) joint venture, the sources disclosed.
One of the people involved stated that the long-term strategy involves manufacturing a complete lineup of BYD-branded electric vehicles in India, spanning from hatchbacks to luxury models. This initiative aligns with BYD's plan to establish manufacturing operations in India, which has become the world's third-largest car market.
While BYD is yet to comment on the investment proposal, India's commerce and heavy industries ministries have not responded to requests for comment either.
The introduction of BYD in India is part of its rapid global expansion and serves as a direct challenge to Tesla, which currently dominates EV sales. If approved, this investment would enable BYD to establish a presence in major global car markets, excluding the United States.
Tesla, after temporarily suspending plans to enter the Indian market due to unsuccessful negotiations regarding lower tax duties on imported vehicles, has recently resumed talks with the Indian government.
BYD has already invested $200 million in India, where it currently offers the Atto 3 electric SUV and the e6 EV to corporate fleets. The company intends to launch its Seal luxury electric sedan in the country this year. The precise production capacity proposed by BYD remains undisclosed.
In its expansion efforts, BYD plans to scale up production to 100,000 EVs annually in India over a few years. Initially, the company may opt to ship vehicles in parts for assembly within the country while simultaneously developing a robust supply chain.
The investment proposal also includes provisions for BYD and Megha Engineering to establish charging stations in India, as well as research and development and training centers.
This joint venture proposal arises against the backdrop of stricter investment regulations. Since 2020, India has intensified scrutiny of investments from neighboring countries, including China. These controls compelled Great Wall Motor (601633.SS) to abandon a $1 billion investment plan in India, while Chinese state-owned automaker SAIC's (600104.SS) MG Motor unit sought a local partner.
BYD, headquartered in Shenzhen, entered the Indian market in 2007, initially focusing on manufacturing batteries and components for mobile phone makers. In 2013, it formed a joint venture called Olectra Greentech with Megha Engineering to produce electric buses.
In 2022, BYD, an acronym for "Build Your Dreams," sold a total of 1.86 million battery electric vehicles and plug-in hybrids. In India, EVs accounted for just over 1% of total car sales, amounting to 3.8 million in 2022. However, the Indian government aims to increase this figure to 30% by 2030.
In the Indian market, BYD will face competition from domestic automaker Tata Motors (TAMO.NS) and its Chinese counterpart, MG Motor, which currently dominate electric car sales.
BYD Co submits a $1 billion investment proposal with Megha Engineering to establish an electric vehicle joint venture in India.
The plan includes manufacturing a complete range of BYD-branded electric cars in India, aiming to challenge Tesla's dominance.
BYD already operates in India, selling electric SUVs and EVs and plans to launch its luxury electric sedan this year.
Source: REUTERS