Chinese e-vehicles giant BYD, which has won major orders in India, does not get any subsidy in its country, its Indian partner Goldstone Infratech has said, refuting Indian rivals’ claims that they face unfair competition.
Additionally, a Goldstone Infratech spokesperson told ET, the company will be able to localise half the components for electric buses being built for India, in the next two years. “BYD is a global company, widely held and backed by marquee investors like Warren Buffett and Samsung Electronics, with manufacturing facilities across the globe.
There are no export subsidies given on Chinese electric vehicle (EV) manufacturers. Such concerns are unfounded,” he said. “Goldstone-BYD buses comply with all localisation norms under Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (FAME) policy and Make in India. We expect to ramp up localisation component above 50% in next two years,” the spokesperson said. A government official said Ashok Leyland has localisation of 37%, while Tata Motors is at 35%.
Batteries that comprise a major cost of EVs are not manufactured in India and companies import them from the likes of China, Japan and South Korea.
On March 23, ET reported that BYD’s entry into India by bagging large tenders for electric buses has started worrying the domestic auto industry. Indian companies questioned the government’s decision to allow a company of the size of BYD to participate in the recent tenders and also said the move is a spoiler to Make in India. “It’s conjecture. We don’t have facts and figures to support that they (BYD) are receiving subsidies.
BYD, like any Chinese company, has very deep pockets and obviously, it is heavily backward integrated, as we understand. They will have a price advantage. Any company which wants to make a mark, looks at very predatory pricing. So everybody wants to be there and get the first mover’s advantage. Predatory pricing is anybody’s prerogative. How much is subsidised, one doesn’t really know," said an industry player who did not wish to be quoted.
Tata Motors and Goldstone-BYD bagged nine of 10 contracts, partfunded by the Centre, leaving competitors such as Mahindra & Mahindra, Eicher Motors and JBM Solaris empty-handed. Winning bids placed by the duo were nearly 30% lower than market price. Tata Motors bid as low as Rs 77 lakh per e-bus in some tenders. However, some of the tenders bid on supply-operate basis have been put on hold by the government as it is figuring out ways to evaluate the exact cost of e-buses.
Indian companies said BYD has access to low-cost funds and subsidies from China that pose threat in terms of competition and scaling up manufacturing. ”It’s what we call Chinese dumping with home benefits,” said an industry player on condition of anonymity. The e-bus tenders were part of a pilot scheme of the Department of Heavy Industries that had, in December 2017, sanctioned Rs 440 crore to 11 states for procurement of 390 electric buses, taxis and autos under FAME that offers up to 60% subsidy on e-bus procurement.
Source- The Economic Times