BYD Considers Electric Boat in India as Orders Pour In

BYD Atto 3. (Photo: BYD)

JAKARTA - Chinese electric vehicle manufacturer BYD is beginning to study expansion steps in India by considering local assembly options. This strategy emerged in response to high market demand that clashed with the strict rules for importing complete vehicles in the country.

Citing sources familiar with the company's plans, this evaluation was carried out after a surge in orders made BYD's supply more stressed due to the limitations of the applicable import quotas. Quoted by Y-Auto, Thursday, January 29, consumer demand has exceeded the company's distribution capacity under the current regulatory scheme.

The Indian government limits imports of completely built-up (CBU) vehicles to a maximum of 2,500 units per model each year. This policy is a challenge for BYD, given that local dealers have reportedly bagged hundreds of orders.

On the other hand, most of the stock for the December quarter has been sold out. Even though it is burdened with high import duties of up to 110 percent for complete cars, BYD's sales in India still jumped about 88 percent last year to around 5,500 units.

The company is also implementing an aggressive pricing strategy, with some models positioned as more affordable than competitors such as Tesla. To circumvent regulatory obstacles while reducing costs, BYD is said to be considering a semi-knocked-down (SKD) assembly scheme.

This method allows vehicles to be imported in a semi-finished state, then assembled locally. Industry players say that the SKD approach has the potential to cut import tariffs from around 70 percent to approximately 30 percent.

In addition to being more economical, this scheme is considered to be able to accelerate the licensing process compared to supplying cars in a fully ready-to-use condition. Previously, India had rejected BYD's proposal to build a full assembly facility.

Now, the discussion is directed at a lower cost option through the assembly of semi-finished components. The realization of this plan is still pending a visit by senior executives of BYD to India.

Currently, BYD markets a number of models in the Bollywood State, including the compact electric SUV Atto 3 and the eMax7 MPV. The company also offers the Sealion 7 and Seal sedans, which have obtained approval for import exceeding the standard quota.

The discourse on the shift to local assembly aims to expand the capacity to ship vehicles to consumers without violating import rules. However, the plan is still in the study phase and has not been officially confirmed by BYD and Indian regulators.