India’s electric vehicle (EV) market is on the brink of a major transformation as Chinese EV giant BYD reportedly plans to set up a manufacturing facility in Hyderabad, Telangana. If realized, this Rs. 85,000 crore ($10 billion) investment will not only be one of the largest private sector projects in the state but also a key milestone in India’s EV industry.
With the Telangana government offering full support, including land allocation, BYD is evaluating three potential locations in Hyderabad. Once a site is finalized, a formal agreement is expected, setting the stage for a state-of-the-art EV and battery production hub. The facility is projected to cover 500 acres and will have an annual capacity of 600,000 vehicles by 2032, making India a major manufacturing hub for BYD’s global operations.
Why BYD’s Entry Matters
Despite operating in India for years, BYD has not had a local manufacturing unit. Currently, the company imports its electric cars from China, leading to high costs due to import duties. This has hindered BYD’s success in India’s competitive EV space. However, with a local plant, production costs will reduce significantly, allowing BYD to price its cars more competitively and increase its market share.
BYD has been working towards setting up an Indian manufacturing facility for the past two years, but stringent regulations on Chinese investments posed challenges. However, with recent policy relaxations, the path for the BYD project appears smoother. This move aligns with the government’s push for EV adoption and localization of production.
A Gigafactory for Battery Production
Apart from manufacturing electric cars, BYD is also planning to establish a 20-gigawatt battery plant in India. This will play a crucial role in advancing India’s EV ecosystem, reducing reliance on battery imports, and fostering local supply chain development. The factory’s battery unit will produce high-capacity lithium-ion batteries, including BYD’s proprietary Blade Battery, known for its superior thermal management, longevity, and safety.
Tesla vs. BYD: The Race Intensifies
The Indian EV market is poised for heightened competition, especially between Tesla and BYD. Tesla has long been eyeing India but has yet to establish a manufacturing facility. The American EV giant is reportedly exploring contract manufacturing agreements with Indian and Japanese carmakers. However, without local production, Tesla vehicles will continue to carry a price premium, giving BYD an edge with its localized manufacturing strategy.
Globally, BYD has overtaken Tesla in revenue, reporting $107 billion in 2024 compared to Tesla’s $97.7 billion. While Tesla remains a pure-play EV maker, BYD benefits from a diverse portfolio that includes hybrids, which have bolstered its sales figures. The competition between these two giants will likely reshape India’s EV landscape.
Hyderabad: The New EV Hub?
With BYD setting up a large-scale factory, Hyderabad could emerge as a key EV manufacturing hub in India. The state government has actively promoted EV adoption, introducing policies that exempt road tax and registration fees for all EV categories until 2026. This pro-EV stance makes Telangana an attractive destination for manufacturers looking to capitalize on the growing market.
Industry analysts predict that with local manufacturing, BYD could capture up to 15% of India’s EV market by 2028. The establishment of an EV cluster in Telangana will also encourage ancillary industries, including component suppliers, battery manufacturers, and charging infrastructure providers, to set up operations in the region.
The Future of India’s EV Market
BYD’s investment marks a significant step toward India’s ambition of becoming a global EV powerhouse. The presence of a major international player with a strong manufacturing base will drive competition, accelerate innovation, and make electric vehicles more affordable for Indian consumers. Moreover, it will create thousands of direct and indirect jobs, boosting the local economy.
As the Indian government continues to push for EV adoption through incentives and policy support, companies like BYD and Tesla will play a crucial role in shaping the market. The coming years will determine whether BYD’s strategic move will pay off, but one thing is clear—India’s EV revolution is gaining serious momentum.
