BYD (“Build Your Dreams”) has submitted a $1 billion investment proposal to build electric vehicles and batteries in India.
BYD’s renown
The company is the world’s largest producer of EVs and plug-in hybrid vehicles.
It is renowned for its cutting-edge Blade Battery and dual-mode hybrid power technology.
India is of special interest since it is currently the world’s third-largest automobile market.
EV joint venture
BYD has submitted a joint proposal with Hyderabad-based Megha Engineering & Infrastructures Limited to form an EV joint venture to the Department for Promotion of Industry and Internal Trade (DPIIT).
Once the approval is obtained, both companies will approach the State government to discuss land and other essential facilities.
“Investment for the project is going to be made by Megha while the technology and knowhow will come from BYD,” said one of the persons associated with the plan.
Presence in India
It had previously invested $200 million in India.
It currently sells the Atto 3 electric SUV and the E6 EV for corporate fleet sales in the Indian market.
The Atto 3 electric SUV, launched in November 2022 is priced at Rs 33.99 lakh.
The e6 MPV is priced at Rs 29.15 lakh.
Plans
The JV intends to set up charging stations in India and build research and development facilities and training centers.
It has also proposed to set up a 10,000-15,000 unit four-wheeler making factory in Hyderabad.
BYD wants to scale up the production to 1,00,000 EVs annually over the course of a few years.
However, it will begin by shipping vehicles in parts for assembly in the country in order to set up a robust supply chain.
Going up against Tesla
BYD’s proposal is a tactic to pose a challenge to Tesla, which currently holds the top position in EV sales.
Tesla had also expressed interest in India after the meeting of CEO Elon Musk and PM Modi in the US.
How it benefits from India
If BYD gets the green signal it would add to its presence in all major global car markets except the US.
It would also be able to capture a greater share of the global EV market.
Long term vision
It plans to launch its Seal luxury electric sedan later this year.
In the long run, it plans to build a full product line-up in India ranging from hatchbacks to luxury models.
India “not keen”
Due to security concerns, it is being reported that the government is not keen on allowing the Chinese company to establish itself in India.
According to the Times of India report, there is “discomfort in the home and external affairs ministries over the entry of Chinese players in the wake of the government’s stand to keep players from across the border out of the Indian market, given the security concerns around several of them”.
Using Indian firms as proxy
“There are growing concerns in the government that many joint ventures “arranged” by the Chinese companies but are “heavily weighed and controlled by the foreign partner”.
“The Indian company is more or less a dummy entity, with not much control on technology, decision-making, and other critical know-how,” the Times of India claimed.
Previous attempts had been made by Chinese automobile firms who seek to bypass restrictions by using Indian partners as a front.
However, they express no strategic long-term intention of moving capabilities to India.
“Any proposal without a strategic long term plan for production defeats the purpose of making the country a manufacturing hub,” one of the sources said.
