BYD Eyes Local Assembly in India Amid Soaring Demand

BYD Co., a prominent Chinese electric vehicle manufacturer, is considering local assembly options in India to meet the surging demand for its electric cars. This comes after the company faced challenges in establishing a full assembly plant previously. Instead, BYD is now exploring the possibility of assembling semi-assembled parts to ease the regulatory process and reduce costs.

The Indian market has shown a remarkable appetite for electric vehicles, with BYD's sales skyrocketing by approximately 88% last year, totaling around 5,500 cars. However, the company has faced limitations due to import quotas that restrict the number of fully built models to 2,500 units. This has pushed BYD to rethink its strategy and explore local assembly to capitalize on the growing demand.

BYD's decision to consider local assembly aligns with its objective to diversify beyond the Chinese market, which has seen a slowdown due to increasing competition and reduced government subsidies for electric vehicles. With the Indian automotive market being one of the fastest-growing globally, the opportunity for BYD is significant. However, the company must navigate various regulatory hurdles that have historically posed challenges for foreign automakers in India.

In contrast to competitors like Tesla, which have struggled with sales due to high tariffs, BYD's pricing strategy has allowed it to compete effectively in India's mass-market EV segment. The Atto 3, for instance, is priced at 2.5 million rupees, making it accessible despite the 70% import tariff. The potential shift to semi-knocked down (SKD) assembly could further reduce tariffs to 30%, enhancing BYD's competitiveness.

As the Indian electric vehicle landscape evolves, BYD is taking proactive steps, including engaging with local auto regulators to highlight how import limits could hinder its growth in the region. Dealers currently waiting on hundreds of orders indicate a strong market demand that BYD is keen to fulfill.

Despite the geopolitical tensions and regulatory scrutiny surrounding Chinese investments in India, BYD's commitment to the Indian market appears unwavering. Senior executives from the company have been visiting India to explore opportunities, signaling a strategic pivot towards strengthening ties with this burgeoning market.