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BYD will shelve plans to invest $1 billion in an electric car plant in India and has told its Indian joint venture partner that the investment proposal faces scrutiny by the Indian government, according to media reports. It is understood that BYD executives told India's Megha Engineering Company last week that BYD wants to exit the investment. So far, however, BYD has not formally withdrawn its investment proposal.

As of press time, BYD officials have not responded to the above news.

According to the report, BYD previously planned to form an electric vehicle joint venture with Hyderabad-based Megha Engineering Company, and planned to build a joint venture plant in India at a cost of 1 billion US dollars. The long-term goal is to produce a full range of BYD electric vehicles in India, including all models from hatchbacks to luxury cars. But Indian regulators have rejected proposals by the two companies to build factories together, the Economic Times of India reported last week. The Indian Ministry of Commerce and the Ministry of Industry and Internal Trade Promotion (DPIIT) have consulted other departments on the investment proposal. In the course of the review, some Indian officials raised "concerns about the safety of Chinese investment in India", while others said that "existing rules do not allow such investment."

According to the previous report of Automotive Industry concern, BYD has entered the Indian market for 15 years. BYD has begun to expand the Indian market and set up branches since 2007. According to statistics, so far, BYD has invested more than 200 million US dollars in the Indian market, of which BYD has a factory in India, which is mainly used to produce BYD e6.

In February 2022, BYD delivered its first 30 e6s in India at a price of 2.96 million rupees (250000 yuan). In October of the same year, the relevant person in charge of BYD revealed that BYD India is considering building a second factory in India, and will announce the relevant news in due course. In the same month, BYD announced its official entry into the Indian passenger car market and the launch of the all-electric SUV ATTO 3, while the all-electric sedan seal will also be released in the fourth quarter of this year. BYD has sold about 1950 new cars since it was sold in India in 2022, according to government registration data.

It is important to note that the Indian market is more complex than other countries. According to the Association of Indian Automobile Manufacturers (SIAM), the Indian car market grew by more than 12% from 2000 (750000) to 2010 (1.87 million), but the industry grew by only 3% from 2010 to 2020 (2.43 million). Before, including Ford, Toyota, Honda, General Motors, Volkswagen and other car companies have been very mediocre after entering the Indian market. Among them, due to years of losses, overcapacity and less-than-expected growth of the Indian car market, it was finally announced in September 2021 that it would stop producing cars in India and close its manufacturing operations in Sanand in the western state of Gujarat and the southern city of Chennai. Toyota, Honda, GM and Volkswagen, which entered the Indian market almost at the same time as Ford, are also very mediocre. Data show that as of 2019, Toyota, Honda, Ford and Volkswagen had a total market share of 12.5%. Less than 1/5 of Suzuki's sales in India, while General Motors announced in 2017 that it would withdraw from the Indian market and stop selling cars in the Indian market.

In this context, Chinese car companies are entering the Indian market on a large scale. The first to enter the Indian market is the Shanghai Automobile Group's Mingjue brand, since then Great Wall Motor, Foton Motor, Changan Automobile and BYD have also announced the layout of the Indian market. According to the data, the cumulative sales of passenger cars in India's domestic market in 2021 was 3.08 million, an increase of 27% over the same period last year. People in the domestic industry believe that "although the Indian automobile market is small, it is an important base for radiating South Asia, with an average annual export of about 650000 vehicles in recent years," while Chinese car companies entering the Indian market may have taken a fancy to India's potential economic growth and export prospects.

However, in 2020, the Indian government changed its foreign direct investment policy, requiring investment in India from countries bordering India's land to be approved by the government. This policy has also disrupted some car companies planning to enter the Indian market. In January, Great Wall planned to invest $1 billion to buy GM's plant in Talegang, India, which was originally scheduled to be completed in the second half of 2020, but failed because it could not get approval from the local government and relevant regulators.

Last year, Tesla also considered entering the Indian market, but Tesla eventually failed to negotiate with the Indian government on import tariffs because of India's high taxes and complex legal structure, so he suspended local expansion. However, in June this year, Tesla CEO Elon Musk revealed that Tesla would invest in India as soon as possible. It was reported that earlier this month, Indian media reported that Tesla had begun to discuss plans to build a local factory with the Indian government, and Tesla might accelerate investment in India to produce brand new models priced at 24000 US dollars.

In addition, in June, SAIC was forced to relinquish ownership of MG India because the Indian government wanted to increase local partner control over the company. SAIC subsequently issued a clarification statement denying the rumors. SAIC said, "the relevant content of this news seriously deviates from the facts. SAIC's international operation strictly abides by the policies and regulations of our country and the countries where its overseas business is located, and fully respects the laws of the market." fully master autonomy. The equity transaction of SAIC holding MG India involving MG India needs to be approved by the Chinese government, and we will release official information in due course. " However, industry insiders believe that it is an indisputable fact that MG has been frequently censored in India in recent years.

Last year, India overtook Japan for the first time to become the world's third-largest car market after China and the United States. Car sales in India were 4.7255 million in 2022, up 25.7 per cent from a year earlier, according to the Association of Indian Automobile Manufacturers. Statistics at the beginning of the year show that India has a population of 1.4 billion, and the super population has also brought new development opportunities for new car sales in the Indian market. Industry people say that although electric vehicles accounted for less than 2% of total car sales last year, India's new energy market has great potential, and the local government has determined that electric car sales will account for 30% of total sales by 2030. At present, however, India does not have a car company that can actually produce power batteries, which makes executives of many car brands eager to gain a first-mover advantage.

Previously, Sanjay Gopalakrishnan, senior vice president of BYD India, had said that BYD planned to account for 40 per cent of the Indian electric car market by 2030. According to the plan, BYD's plant capacity in India would expand from the current 10, 000 vehicles a year to 15000 vehicles. By 2030, BYD will sell 15000 ATTO 3 and e6 vehicles in the Indian market. It is still unclear whether BYD's plan to shelve a $1 billion plant will affect its expansion plans in India.

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