Before Musk’s Tesla Starts its Engines, China’s BYD is Racing Ahead in India

For Ahmedabad-based Luv (name changed on request), Chinese automaker BYD’s Sealion 7 was an easy choice when it came to switching from his Toyota Fortuner earlier this year. Bought in April, the Sealion is the latest and the most premium offering yet from the Chinese carmaker.

The all-electric SUV was an upgrade in every sense for the 32-year-old businessman—from a thrilling 0 to 100 km per hour in 4.5 seconds to its sleek and futuristic design and a powerful battery with the best in-class range. The China-made car not only beat his range anxiety but also its competitors in the market. 

Luv’s confidence in the brand stemmed from experience—this is the third BYD vehicle in his family after Atto 3 and Seal. “So far, [we have had] no complaints from any BYD [car],” he says, expressing confidence that the Sealion 7 could become one of the top-selling cars in the country.

In the Driver’s Seat

While other automakers prepare to step up their game in India’s nascent EV market, the Chinese giant is silently making inroads on the back of a competitive pricing strategy, feature-rich product portfolio and rising consumer confidence in the brand.

Despite being a relatively new entrant in the Indian electric passenger-vehicle segment, BYD’s market share rose from 1.95% in financial year 2024 to 3.16% in financial year 2025 to become the fourth-largest player, beating Hyundai (2.24%) and Citroën (1.82%).

The company sold 3,401 cars in India in financial year 2025, a 90.31% rise from the previous year, according to the Federation of Automobile Dealers Associations (Fada). This makes it one of the fastest-growing auto brands in the country, trailing only MG Motor (158.17%) and Mercedes-Benz (100.53%).

This staggering growth, though built on low sales numbers, came despite the company’s cars facing import duties of up to 110% as it either imports completely knocked down (CKD) units or completely built up (CBU) units from China.

BYD has so far steered clear of a direct, volume-driven confrontation with mass-market leaders like Tata Motors or Mahindra, instead carving out a niche in the accessible luxury segment. The strategy has steadily fuelled its growth in India.

Take, for instance, the Sealion 7. Though it has not topped sales charts yet, the model has received a positive response from Indian buyers, garnering 1,000 bookings within a month of its debut at the Bharat Mobility Global Expo in January, the company said in a press release.

Industry watchers believe this could turn into a thorn in the side for Elon Musk’s Tesla. While Tesla prepares for its entry into India's EV market following years of flip-flops and negotiations on import duties and manufacturing sops, its biggest global rival is already gaining ground in the country.

BYD—backed by investor and philanthropist Warren Buffett and bolstered by deep R&D and battery muscle—hasn’t waited for policy concessions. The company is targeting the entry-level luxury car market, a segment considered less price sensitive which allows it to maintain price competitiveness despite higher cost.

In 2023, BYD surpassed Tesla in quarterly EV sales for the first time, cementing its lead in pure-play electric mobility. Unlike Tesla’s focus on a few high-margin models, BYD has built a vertically integrated empire spanning batteries, chips and cars, allowing it to offer everything from budget EVs to luxury sedans. While Tesla’s average selling price hovers around $45,000, BYD’s is nearly half that—giving it an edge in emerging markets. Globally, Tesla may have pioneered the premium EV revolution, but BYD is rapidly closing the gap—and in some markets, pulling ahead. 

Under the Hood

Starting at ₹48.90 lakh, the Sealion competes directly with BMW iX1 (₹49 lakh), Hyundai Ioniq 5 (₹46.05 lakh), Kia EV6 (₹60.97 lakh) and Volvo EX40 (₹56.10 lakh). At this price point, it is also likely to be a lot cheaper than Tesla’s cars which are projected to have a sticker price of at least ₹70 lakh in India.

But BYD is not just playing on the price front. Experts say the Chinese EV-maker also beats its rivals when it comes to driving range, top speed and battery capacity.

Compared to its closest contender in the price bracket, BMW iX1, the Sealion 7 stands out with a superior range (567 km versus 531 km), a more powerful battery (82.56 kWh versus 64.8 kWh) and a higher top speed (215 km per hour versus 180 km per hour). 

Moreover, the most expensive BYD model in India, with 530 bhp, leaves the cheapest EV from BMW with 204 bhp far behind.

“[There is] no point paying extra for German brands,” Luv says. 

And while it does not position itself as a budget brand, BYD provides a ‘premium-tech’ or ‘near-luxury’ experience that challenges the value proposition of many established brands.

“The BYD Seal, with its pricing from ₹41 lakh to ₹53.15 lakh, directly enters the consideration set for buyers looking at entry-level electric models from German manufacturers,” says Tarpan Vyas, founder and chief executive of EVINDIA, a resource platform for EVs.

The company’s vehicles, such as the Atto 3 (priced from approximately ₹25 lakh) and the Seal are consistently feature-rich, often offering specifications and interior appointments typically found in higher segments, he explains. 

“We see comprehensive ADAS [Advanced Driver Assistance Systems] suites, large interactive touchscreens and premium-feel interiors,” says Vyas.

Then there is the safety assurance of its blade-battery technology, which plays a key role in garnering customer confidence. This technology, in fact, is one of the value propositions that others have not been able to challenge so far. Rather, BYD’s global rival Tesla and more recently Mahindra, count as customers of the company’s lithium-ion-phosphate batteries.

This combination of advanced core EV technology and extensive features is offered under a value-centric pricing strategy. 

The China Backing

The company also leverages the advantage of hefty subsidies and concessional loans by China’s government.

Since 2010, the Chinese automobile industry has received tax exemptions worth $30bn from the government, which may rise to $97bn by 2027.

Moreover, BYD’s focus on R&D and vertical integration, most importantly, in battery production, reduces cost pressures and strengthens control over the supply chain. In 2023, the company’s R&D investment stood close to 40bn yuan, a rise of 97% from the previous year.

Over the years, the world’s largest EV seller has broadened its manufacturing expertise from batteries and semiconductors to thermal-management systems and ADAS systems.

This helps keep the cost of production far lower than that of other original-equipment manufacturers (OEMs). In India, its Atto 3 (₹33.99 lakh on-road) would cost about ₹11 lakh less than Tesla’s cheapest Model 2 (₹45 lakh), according to a comparison by online car search venture CarDekho.

“BYD has strategically positioned itself to cater to the ₹25 lakh to ₹55 lakh segment—a sweet spot for premium vehicles in India,” says Nikhil Dhaka, vice-president at Primus Partners, a management consultancy.

Global Footprint Aids Local Growth

However, low price and high tech may not meet all expectations of premium EV buyers who often hunt for brand value. A key factor working in BYD’s favour here is its strong global footprint. The EV maker is operational in 88 countries where many of its Indian customers experience the brand for the first time.

“Mostly these are businessmen. When they get positive feedback abroad, they consider BYD while buying their next car back home,” says a BYD dealer in Delhi.

The company also banks on word-of-mouth for promotion by offering top-tier customer service at margins as low as 1–2%, prompting existing customers to recommend the brand. About 25% of its overall volumes come from referrals.

“The idea is to deliver top-notch after-sales service so that customers share the experience within their peer circles,” says Reena Das, customer-relations manager at BYD’s Worli dealership in Mumbai.

The strategy seems to be working well for the company as many of its customers agree that personal recommendations helped them shed the scepticism towards the ‘China’ tag.

Take the case of Faridabad-based Anil Khurana. It was a family friend who introduced him to BYD in 2023. The 58-year old pharmacist, whose first car was the iconic Maruti 800, was initially reluctant to even take a test drive of Atto 3 just because it was a Chinese brand.

“After the test drive, I was hooked,” he says.

Apart from the luxury look and premium build quality, what turned out to be a deal breaker was the extra leg space, an important feature for a family where everyone is above six-feet-tall, he tells Outlook Business.

He has just one issue with the company. As BYD’s app hasn’t received approval to function in India, he is unable to use some features of the car like Google Maps and the vehicle tracker.

Speed Breakers Ahead

The China tag, which played a key role in BYD’s rise as the world’s largest EV manufacturer, may stand in its path in India on account of regulatory scrutiny and geopolitical tensions.

Customers, in the meantime, are facing the brunt. It took 40 days for Ghaziabad-based lawyer Bharat Bhushan to get his E6 back from a service centre after a minor accident in January resulted in the deployment of the driver-side air bag.

“They import all the sensor-based components from China which resulted in a prolonged repair time,” Bhushan tells Outlook Business over the phone, calling the decision to buy a China-made car his “biggest mistake”.  

The maintenance head at a Delhi dealership says every part of a BYD car is shipped from the company’s Chennai-based unit to Delhi. “It takes eight to 10 days after the demand order is placed,” he says, adding that the waiting time may extend further if the part has to be imported from China.

“But that happens rarely,” he says.

Though operational in India since 2007 in the electronics and electric-bus market, BYD started selling electric passenger vehicles in 2021, soon after border tensions with China flared up after the Galwan Valley clash.

Subsequently, Chinese investments in India came under heightened scrutiny under the Press Note 3 scheme. As a result, the Indian government in 2023 rejected a proposal by BYD to set up a $ 1bn manufacturing plant in partnership with Megha Engineering and Infrastructures.

Union Commerce Minister Piyush Goyal in April this year reiterated the Centre's stance on the company’s investment in India, saying it was “a no for now”. In addition to this, the EV-maker is under the scanner of the Directorate of Revenue Intelligence (DRI) for allegedly underpaying about $9mn in taxes on imported components.

Experts say these issues can impact the expansion of BYD in India.

“Heightened geopolitical sensitivities and increasingly stringent FDI regulations represent structural risks for expansion and supply-chain localisation. If such regulatory headwinds persist, they could significantly limit BYD’s ability to achieve broader market penetration in India,” says Dhaka of Primus Partners.

Vyas of EVINDIA, however, is more upbeat given BYD’s measured approach in growing its India footprint through an import-and-assemble strategy.

The company, too, is optimistic when it comes to its India prospects. Rajeev Chauhan, India head of the electric passenger-vehicles business, said that BYD was keen to set up a manufacturing base in India as soon as regulatory hurdles are addressed.

BYD’s growth in India would ultimately benefit consumers as its competitive pricing and technologically advanced products may push luxury as well as mass-market automakers to reassess their pricing strategies and focus more on R&D. This could help fill the innovation gap within India’s electric passenger-vehicle segment, say experts.

According to Dhaka, mass-market players are likely to prioritise affordability and total cost of ownership in response to growing competition.

“BYD is acting as a catalyst, compelling established luxury car companies to be more agile, technologically aggressive and value-conscious in their EV strategies for the Indian market," Vyas adds.

Clearly, BYD is gearing up for a long innings in India, undeterred by the challenges it faces and driven by the opportunity for growth the country presents.