BYD has told its India joint-venture partner it would shelve plans for a new $1-billion (approx. Rs. 8,225 crore) investment to build electric cars after its investment proposal face scrutiny from New Delhi, two people with knowledge of the topic said.
BYD and its partner, privately held Megha Engineering and Infrastructures, submit a proposal to the Indian government in April to jointly build electric cars in India, as per reported earlier this month.
But in the initial review, officials from three Indian ministries, including finance and external affairs, raise what two Indian officials describe as security concerns about investment from the Chinese company and signal opposition.
BYD executives told Megha Engineering last week that the battery and EV maker want to drop pursuit of the investment, according to the two people with knowledge of that exchange.
It was not immediately clear whether BYD could have second-thoughts, and as of BYD had not formally withdrawn the investment proposal from government review, the two officials with knowledge of the review said.
BYD, China’s largest EV maker, decline to comment on the status of its investment proposal and whether it would pull the plan to produce electric cars in India.
China’s BYD said it has had a presence in India for 16 years, selling both passenger cars and electric-drive buses.
India’s finance, external affairs and home ministry did not reply to an email seeking comment.
Megha Engineering did not respond to request to comment.
During a meeting last week, Hyderabad-based Megha Engineering urge BYD to wait for more clarity on the situation before moving to drop the electric cars manufacturing plan, according to the two people with knowledge of the discussion.
BYD had understood its investment proposal would be politically charge because of the scrutiny of Chinese investment in India and had attempt to head off concerns, the two people with knowledge of its planning said.
The proposal said voice-activate commands for apps would be available in Indian languages in BYD electric cars built in India and that all data from the vehicles would be house in India, one of the people said.
BYD had propose starting production in India by 2025, the people familiar with the plan said.
India began subjecting investment from China to closer scrutiny in 2020 amid a series of border clashes between the two countries.
China’s Great Wall Motor shelve its plans to invest $1 billion after failing to get clearances from the Indian government.
A final decision on whether to approve BYD’s investment proposal would be taken by Indian ministries of trade and heavy industries.
BYD, the world’s largest producer of EVs and plug-in hybrid vehicles, enter into the Indian market in 2007 producing batteries and components for mobile phone makers.
In 2013 China’s BYD start building electric buses in India with Megha Engineering, under a joint venture company called Olectra Greentech.
BYD, which has already invest over $200 million (approx. Rs. 1,645 crore) in India, markets the Atto 3 electric SUV and the e6 EV to corporate fleets and plans to launch sales of its Seal electric sedan later in 2023.
BYD has sold about 1,950 cars in India since starting sales in 2022, according to government registration data.
India’s EV market is small but growing with domestic automaker Tata Motors dominating sales.
Electric models made up less than 2% of total car sales in 2022 but the government wants to grow this to 30% by 2030.
