BYD has told its Indian joint venture partner that it will shelve plans to invest $1 billion in building electric vehicles after its investment proposal faced scrutiny from New Delhi, Reuters reported.
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BYD (OTCMKTS: BYDDY) is reportedly looking to drop plans to invest $1 billion in building an electric vehicle (EV) plant in India after the plan hit a snag with government authorities.
BYD has told its Indian joint venture partner Megha Engineering and Infrastructures Ltd that it will shelve plans to invest $1 billion to build EVs as its investment proposal faces scrutiny in New Delhi, Reuters said today, citing two people familiar with the matter.
On July 14, Reuters reported that BYD and Megha Engineering submitted a proposal to Indian regulators to form a joint venture for making EVs.
The long-term plan is to produce a full range of BYD-branded EVs in India, from hatchbacks to luxury models, Reuters previously reported.
However, Economic Times reported on July 22 that India rejected BYD's proposal to set up a plant, citing security concerns.
BYD executives told Megha Engineering last week that the company wanted to drop its pursuit of the investment, a Reuters report today said, citing two people familiar with the matter.
It was unclear whether BYD would have second thoughts, and as of Thursday BYD had not formally withdrawn its investment proposal from the government review, the two officials with knowledge of the review said.
At a meeting last week, Megha Engineering urged BYD to wait for further clarity on the situation before abandoning its EV production plans, according to the Reuters report.
BYD entered the Indian market in 2007, producing batteries and components for cell phone makers, and in 2013 it began a partnership with Megha Engineering to produce electric buses in India in a joint venture called Olectra Greentech, the Reuters report noted.
BYD has invested more than $200 million in India to sell the Atto 3 electric SUV and e6 EV to corporate fleets, and plans to start selling the Seal electric sedan later this year, the report said.
Chinese automotive media outlet Yiche reported on December 6, 2022 that BYD's plant in India saw the first Atto 3 roll off the assembly line, with the model being produced through SKD (Semi Knocked Down) assembly.
SKD refers to when a car company exports semi-finished products or components to a country where an overseas factory is located and the local factory assembles the vehicle and sells it.