China’s BYD, one of the world’s largest electric vehicle makers, is considering locally assembling cars in India as demand outpaces supply and dealers struggle with mounting unfulfilled orders, according to people familiar with the matter.
Dealers across major cities are sitting on hundreds of confirmed bookings, but tight import limits on fully built units have slowed deliveries, leaving customers facing long waiting periods. The situation has forced the company to explore workarounds in a market it once viewed cautiously.
At the heart of the issue lies India’s restrictive import framework for fully built electric vehicles. Under current norms, foreign automakers face caps on the number of cars they can import annually per model, along with steep duties.
For BYD, which currently sells imported models such as the Atto 3 and Seal, demand has surged faster than anticipated. Dealers say supply has not kept pace, creating a backlog that is beginning to strain customer relationships.
“People are willing to wait, but not indefinitely,” said a dealer who asked not to be named. “We have bookings, but limited cars to deliver.”
To ease the bottleneck, BYD is exploring local assembly through semi-knocked-down (SKD) kits, rather than importing fully built cars. This approach allows automakers to bring in key components and assemble vehicles locally, helping reduce duties and bypass volume caps tied to complete imports.
While this is not full-scale manufacturing, it would mark a significant shift in BYD’s India strategy. The company’s earlier proposal to set up a complete manufacturing plant was rejected by Indian authorities, amid tighter scrutiny of Chinese investments.
Local assembly would allow BYD to respond more quickly to demand without reopening politically sensitive questions about ownership and control.
India is one of the fastest-expanding electric vehicle markets worldwide, yet it faces strict government regulations that govern its market operations. Chinese automobile manufacturers must find a way to meet their growth targets while adhering to regulatory requirements.
Industry experts believe that SKD assembly operations serve as a compromise solution that allows companies to show their commitment to the Indian market without triggering adverse policy responses. The system provides customers and dealers with the ability to experience reduced waiting times and consistent product availability.
Whether BYD’s plans translate into regulatory approvals and operational timelines remains unclear. But for now, the growing pile of orders suggests one thing plainly: Indian buyers want the cars, and they want them sooner rather than later.