Buffett-backed BYD in advanced talks to develop, make EVs in India3 min read . Updated: 27 Jun 2019, 11:51 PM IST
- Firm in advanced talks with Indian partner Olectra for an equity JV or a stand-alone entity in the country
- BYD’s investment would mark a deepening of Chinese presence in India’s auto market
NEW DELHI : Warren Buffett-backed BYD Auto Co. Ltd, China’s biggest electric carmaker, is set to make a significant investment in India to develop and produce electric vehicles, said two people familiar with the matter.
BYD is expected to unveil its investment plans by the end of 2019 or in early 2020, said the two people cited above who declined to be named.
The company is in advanced talks with its Indian partner, Olectra Greentech Ltd, to either form an equity joint venture or invest in a stand-alone entity in the country, the two people said. BYD currently has a technical alliance with Secunderabad-based Olectra for assembling BYD’s electric buses in Andhra Pradesh. It has also recently begun assembling lithium-ion cells at a factory in Chennai.
BYD’s investment would mark a deepening of Chinese presence in India’s automobile market billed to become the world’s third largest by 2025. China’s SAIC Motor Corp. Ltd introduced on Thursday, the Hector sport-utility vehicle, the first of a series of models planned by unit MG Motor India Pvt. Ltd. SAIC has invested ₹2,200 crore so far in India.
Meanwhile, Great Wall Motors Co. Ltd, China’s largest SUV producer, has earmarked an initial investment of $1.6 million to open a subsidiary in India.
The burgeoning presence of Chinese companies come amid rising trade tensions with the US and also the fact that India with its large middle-class offers a long-term growth opportunity.
BYD, which is also one of the world’s top producers of lithium-ion batteries, is enthused by the Indian government’s commitment to electric mobility and potential of the Indian economy over the next few decades, said the two people cited above.
Both declined to divulge the likely investments by BYD saying the matter is sensitive.
“They are encouraged by the vision of the Indian government when it comes to promoting electric mobility and the mandate it got in the recent elections. Apart from that they have also studied the potential for that the Indian market offers to electric vehicle manufacturers," the person said.
MG Motor is in India for the long term and will continue to invest here in the coming years given the market potential, said managing director Rajeev Chaba. The company has also brought some Chinese parts suppliers of SAIC who have set up a vendor park in Halol, Gujarat, where MG runs its car factory.
Geely Auto Group was in talks with JSW Group to invest in manufacturing electric vehicles. Though the talks failed, the company is still upbeat about the Indian market. Another state-run company Changan Automobile Co. Ltd is also exploring opportunities in India while Chery Automobile Co. Ltd is likely to make an entry with Tata Motors Ltd.
Chinese companies have been expanding their footprint in other sectors in India as well such as smartphones, telecom equipment and start-ups.
Huawei Technologies Co. Ltd, which has been accused of spying by the US, plans to produce telecom equipment in India provide it receives the green signal from the Union government on its participation in 5G roll-outs.
“We have our applications and also proposals based on our 20-year local market insight to help India grow the ecosystem. We can also help grow resources, not just for India market but also enable India to support global market ecosystem...after government gives green light (to let Huawei participate in India’s 5G roll-out), we will share our investment proposals to grow local manufacturing and ecosystem development," said Huawei India chief executive officer Jay Chen.
Xiaomi, which leads India’s smartphone market, last year hosted 50-odd suppliers for a three-day tour of Uttar Pradesh and Andhra Pradesh to explore investment opportunities with an aim to set up a local components ecosystem in the country. Earlier this month, Xiaomi announced that Holitech Technology, a global component supplier has opened its first component manufacturing plant in India. Holitech plans to invest $200 million over three years.
Mobile handset maker Vivo last year acquired a 169-acre plot near Yamuna Expressway on the outskirts of New Delhi where it plans to invest ₹4,000 crore to build a manufacturing facility.
Navadha Pandey contributed to this story.