Chinese electric vehicle manufacturer BYD has announced that it will not be applying for benefits under India’s new electric vehicle (EV) policy in the short term. This policy, introduced earlier this year, aims to attract global manufacturers to establish operations in India.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

Rajeev Chauhan, BYD India’s Head of Electric Passenger Vehicles Business, stated on Tuesday that the company plans to utilise the homologation route to meet the demand for its high-volume models in India. This decision comes as BYD launched its new all-electric multipurpose vehicle, the eMAX 7, priced between Rs 26.9 lakh and Rs 29.9 lakh.

Chauhan explained that representatives from BYD had thoroughly reviewed the new policy and concluded that the company is not yet ready to implement it. “We have decided that, no, we are not ready to implement this policy in the short term. So, we are not applying,” he remarked.

While acknowledging the advantages of having a manufacturing plant, Chauhan emphasised that BYD India has not yet reached that stage. He declined to comment on the potential challenges arising from the geopolitical tensions between India and China.

The new EV policy, announced by the Indian government in March, aims to attract major global players, including Tesla, by allowing them to import a limited number of cars at a reduced customs duty of 15 percent for vehicles priced at USD 35,000 and above. This arrangement is available for five years from the issuance of the approval letter by the government.

To qualify for the benefits, approved applicants must establish manufacturing facilities in India with a minimum investment of Rs 4,150 crore (USD 500 million) for electric four-wheelers. Additionally, these facilities must become operational within three years of approval and achieve a domestic value addition (DVA) of at least 25 percent within the same period, increasing to 50 percent over five years.

The policy allows companies to import completely built units (CBUs) of electric four-wheelers manufactured by them at the reduced customs duty, with a cap of 8,000 units per year. Unutilised annual import limits can be carried over.

Chauhan elaborated on BYD’s short-term strategy, stating, “We would really explore the market for the gaps and opportunities. Wherever we feel that the opportunity exceeds the quota set by the government, we are taking the homologation route and applying for it.” Homologation is the process of certifying vehicles for roadworthiness under government regulations.

Currently, BYD India is importing its new eMAX 7 and SEAL sedan under the Economic Commission for Europe (ECE) vehicle certification, which limits imports to 2,500 units.

Chauhan reiterated that the company's short-term strategy does not call for manufacturing investments and indicated that further developments will require patience. “The eMAX 7 is a testament to our unwavering commitment to innovation and sustainability. We will always be committed to bringing the latest global innovation to our discerning Indian consumers,” he added. The new vehicle is available in two variants, accommodating six and seven passengers.