China’s BYD told its India joint-venture partner it would shelve plans for a new $1-billion investment to build electric cars after its proposal faced scrutiny from New Delhi, two people with knowledge of the discussions said. The world’s largest plug-in vehicle maker had hoped to use the investment to produce a full line-up of EVs in India, including hatchbacks, sedans, and SUVs. The company and its local Indian partner, privately held Megha Engineering and Infrastructures, submitted the plan to the government in April. But during an initial review, officials from three ministries raised security concerns about the Chinese investment and signaled opposition.
The company, known for its Blade batteries and finished EVs, plans to scale up production of 100,000 EVs annually in India over a few years. However, it would initially begin by shipping vehicles in parts for assembly locally as it worked to set up a supply chain. The sources added that the firm also wants to build charging stations, research and development centers, and training facilities. BYD first entered the Indian market in 2007, selling batteries and components. In 2013 it began building electric buses with Megha under a partnership called Olectra Greentech. It later launched its Atto 3 electric SUV and e6 EV for corporate fleets in India and will start selling its Seal luxury sedan there this year.
BYD was aware that its plan was politically charged, given the scrutiny of Chinese investments in India, and had attempted to address any concerns during the planning phase. It planned to offer voice-activated app commands in Indian languages and ensure all data from its EVs made in India would be stored locally, the sources said.
The sources said that India’s trade and heavy industries ministries will decide whether to allow the investment. Officials at the ministries declined to comment. BYD had hoped to begin production in India in 2025. The Indian government started subjecting investments from China to greater scrutiny in 2020 after border clashes between the two countries. The same year, Great Wall Motor pulled its $1 billion EV investment plan after failing to secure clearances.
BYD’s EV sales in India, which include those sold to the government, have been growing at double-digit rates for four straight quarters and have surpassed 100,000 units this year. However, the country’s slowing economy and stricter emission standards are weighing on the sector.
The government has said it wants to double EV sales in the next decade to reduce pollution and cut dependence on imported oil, which accounts for about 60% of its energy needs. The government’s plan to expand charging infrastructure is expected to help propel EV growth.
China’s BYD is the leader in the global EV market, with a market share of nearly 40%, according to data from the International Energy Agency (IEA). The IEA expects global EV sales to grow to around 30 million by 2030, with China accounting for about half of that number.
