BYD’s US$1 billion investment plan reportedly rejected by India on security grounds in blow to global strategy
- BYD’s partnership with Megha aims to build a plant in Hyderabad to manufacture electric cars and batteries in the world’s third-largest EV market
- India’s visa ban on Chinese tourists prevents BYD from making further lobbying efforts while security concerns with respect to Chinese investments also flagged
The world’s largest electric vehicle (EV) maker had planned to send a team of officials to push ahead with the investment, but India’s visa ban on Chinese tourists prevented BYD from making further lobbying efforts, The Economic Times reported, citing an unidentified person who was briefed on the matter.
BYD’s planned factory in partnership with local company Hyderabad-based Megha Engineering and Infrastructure was vetoed by the Department for Promotion of Industry and Internal Trade, the newspaper added.
Security concerns with respect to Chinese investments in India were flagged during the deliberations, the media report said, quoting an unidentified official as saying. It added that existing rules do not permit such investments. BYD declined to comment.
Through the partnership with Megha, BYD aims to build a plant in Hyderabad to manufacture electric cars and batteries, taking a substantial step in tapping the world’s third-largest EV market.
A foothold in India is key to BYD’s plan to bolster sales outside mainland China. Over the long run, BYD intends to produce a full range of EVs in India, from low-priced hatchbacks to luxury models.
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“China-India relations have not thawed and it will be difficult for BYD to win approval [to set up a factory in India] in the near term,” The Economic Times reported, quoting an Indian diplomat who spoke on condition of anonymity.
But this was a short term setback, according to some.
“BYD’s go-global strategy is a long-term goal, and it will revisit the Indian investment deal when time is right,” said Gao Shen, an independent analyst in Shanghai. “BYD’s cars, cheaper than Tesla and other intelligent carmakers’ products, are well received by middle-class and low-income consumers. India will be an important market for the company.”
At present, BYD exports kits of semi-finished vehicles to India which are sent to its semi knocked down (SKD) assembly line in Chennai. These are then converted to EVs – Atto3 and e6 – for delivery to its Indian customers.
Shenzhen-based BYD, which counts Warren Buffett’s Berkshire Hathaway among its shareholders, also plans to launch its bestselling electric sedan Seal in India at the end of 2023.
Early this month, it announced a plan to invest US$620 million in an industrial complex in Brazil’s northeastern Bahia state. It is also building a plant in Thailand, which will have an annual capacity of 150,000 cars when completed next year.
In May, BYD signed a preliminary agreement with the Indonesian government to produce electric cars in the country.
The company is also constructing an assembly plant in Uzbekistan.
