Chinese electric vehicle maker BYD is evaluating options to expand its presence in India, including the establishment of local assembly operations, amid rising demand for its electric vehicles and ongoing import restrictions, a local daily reported.

The company is assessing semi-knocked-down (SKD) assembly models and is working to secure local safety and regulatory certifications for additional models. These plans remain exploratory and have not been publicly announced.

Strategic shift after plant proposal setback

India had previously rejected BYD's proposal to set up a full-scale manufacturing facility amid increased scrutiny of Chinese investments. The automaker is now considering the local assembly of semi-finished components, a route that is regarded as more cost-effective and potentially easier to obtain regulatory approvals.

Any move towards local assembly is expected to follow visits by senior BYD executives, according to sources. A BYD spokesperson did not respond to requests for comment.

Demand and import constraints

The reassessment comes as demand in India exceeds the company's ability to supply vehicles under existing import rules. Dealers have reportedly recorded several hundred pending bookings, with a large portion of the inventory for the December quarter already allocated.

Comparison with Tesla in India

Tesla has offered discounts on certain variants in India to stimulate demand, while BYD's pricing strategy has supported its presence in the premium mass-market electric vehicle segment.

The Atto 3 electric SUV is priced from around Rs. 2.5 million (US$ 27,185), placing it alongside offerings from Tata Motors Passenger Vehicles and Mahindra & Mahindra, and below Tesla's Model Y, which starts at approximately Rs. 6 million. The Sealion 7, priced between Rs. 4.9 million and Rs. 5.5 million, is also priced below the Model Y.

BYD currently sells the Atto 3 compact e-SUV and the eMax7 MPV, both approved for imports beyond the standard quota, along with the Sealion 7 and the Seal sedan. The company has informed regulators that import limits could restrict its expansion plans.

Global expansion beyond China

Expansion outside China has become a focus as growth in the domestic market slows due to lower electric vehicle subsidies and increased competition. BYD is targeting close to 25% growth in deliveries outside China this year.

While India-China relations have shown limited improvement since last year, including the resumption of direct flights, policy support for Chinese automakers in India remains uneven. Some BYD engineers and senior managers have been visiting India since last year, although planned visits by senior executives have reportedly been postponed.

These discussions highlight the regulatory and operational considerations facing BYD as it seeks to expand its operations in the Indian automobile market.