Electric vehicle maker, BYD (Build Your Dreams) announced plans to set up its manufacturing plant in Telangana. With Chinese EV makers facing additional import tariffs in Europe and the U.S., BYD is focused on other markets with potential EV demand growth. The company is set to invest Rs 85,000 crore ($10 billion) in its state-of-the-art manufacturing plant in India.
Does this mean BYD has an advantage over Tesla’s much-awaited debut in the Indian market? By setting up a manufacturing plant, the Chinese EV can localise its production. We decode how this masterstroke for BYD in the Indian market.
BYD’s new India strategy
BYD has decided to take the plunge and has revealed how serious it is for the Indian market as it will set up its first manufacturing plant here. With the Indian Government’s new lower tariff rates on EVs, this gives companies like BYD a much-needed shot in the arm. According to a report by Times of India, Telangana government officials confirmed that the state government has identified 200 acres of land for BYD.
BYD is looking to build the facility in a joint venture with the Hyderabad-based Megha Engineering & Infrastructure Limited (MEIL) group. Two years ago, this joint venture proposal was floated by both the companies, but the state government had rejected it. This time around, things seem to be working out for BYD.
What does this mean for BYD in India?
BYD is currently offering four passenger EVs — Sealion 7, eMAX 7, Atto 3 and Seal, but the biggest challenge has been for the company is bringing in these models via the direct import route, which forced them to price them on the lines of the luxury sector. After building the manufacturing facility, the Completely Built Units (CBU) from BYD, will be built or assembled here, which will drastically cut down on the costs and boost its sales.
Talking about the localisation of the vehicles, Gaurav Vangaal, S&P Global Mobility said, “Currently, global trade and supply chains are under significant pressure, leading to renegotiations of existing trade agreements. Although localisation will greatly strengthen India’s EV ecosystem, geopolitical dynamics and enduring international relationships are likely to heavily influence decisions regarding market entry strategies. Therefore, we might have to wait to understand the type of localization these carmakers will opt for when entering the market—whether it will be CBU, CKD, or fully localized production.”
Will Tesla launch an affordable EV in India?
Tesla is set to make its long-awaited debut in India, but initially, the Elon Musk-led company will import vehicles directly from its Berlin, Germany facility. Reports suggest that the company is aiming to launch an affordable EV under Rs 25 lakh. What is interesting to note is that Tesla’s current entry-level EV, the Model 3 costs around Rs 30 lakh.
Earlier, Kumar Rakesh, Analyst – IT & Auto, BNP Paribas India, said, “Tesla has plans to launch an affordable version of the Model 3 or Model Y in the second half of 2025, with management guiding to a price of $30,000 after IRA subsidies of EUR7.5k in the US, implying an ex-subsidy price of $37.500. Assuming Tesla can produce and sell at as low as $30,000, it will be considered expensive for mass volume in India once 15% customs duties are considered.”
