China's BYD weighs manufacturing in India to meet EV demand
What's the story
Chinese electric vehicle (EV) maker BYD is considering setting up a local assembly in India. The move comes as the company struggles to keep up with the skyrocketing demand for its electric cars. According to Bloomberg, BYD is looking at different options for this expansion and trying to get necessary safety and regulatory approvals for more models amid import quotas.
Regulatory navigation
BYD's strategy to bypass import barriers
Despite India's earlier rejection of BYD's proposal to set up a full assembly plant, the company is now considering an alternative. It is looking at the possibility of assembling semi-assembled parts in India. This would be cheaper and easier in terms of getting regulatory approvals. The decision comes after visits by senior BYD executives and is aimed at overcoming existing import barriers.
Market performance
BYD's India sales surge amid regulatory challenges
BYD's sales in India jumped by a whopping 88% last year, to some 5,500 cars. The growth has been largely fueled by its competitive pricing strategy. This is despite the fact that import duties of up to 110% on fully built cars have been imposed. The company sells the Atto 3 compact e-SUV and eMax7 multipurpose vehicle in India, both of which are approved for imports beyond the 2,500-car quota.
Competitive edge
BYD's pricing strategy and market position in India
The Atto 3 starts at ₹25 lakh ($27,255) even with a 70% import tariff. This puts it at the premium end of India's mass-market EV segment alongside Mahindra & Mahindra Ltd. and Tata Motors Passenger Vehicles Ltd., while still undercutting Tesla. The Sealion 7, which sold 2,200 units in India last year, is priced between ₹49 lakh to ₹55 lakh — below Tesla's Model Y which starts at ₹60 lakh.
Regulatory engagement
BYD's approach to import limits and growth
BYD has approached Indian auto sector regulators to highlight how import limits could affect its growth. Most of its inventory for the December quarter has been sold out, unlike Tesla which continues to struggle against the same tariff barriers. Despite a thaw in relations between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi, policy support remains inconsistent.