Chinese automaker BYD (Build Your Dreams) has announced its decision to cancel its $1 billion investment plan for electric vehicle (EV) manufacturing in India. The company cited the slow growth of the EV market in the country as the primary reason behind its move.

India, which is currently the world’s largest market for two-wheelers, has been pushing towards the adoption of electric vehicles to reduce its carbon footprint and combat rising pollution levels. However, the lack of charging infrastructure and high battery costs have hindered the widespread adoption of EVs.

BYD had initially planned to set up a manufacturing facility in the state of Tamil Nadu with an annual capacity of 20,000 electric buses and 100,000 electric two-wheelers. The company had signed a Memorandum of Understanding (MoU) with the state government in 2019 to formalize its investment plans.

However, after carefully assessing the market conditions and the challenges it might face, BYD decided to scrap its investment plans in India. It believes that the Indian EV market is not yet ready to support such massive investments.

The cancellation of BYD’s investment plan comes as a setback to India’s ambitious plans to become a global hub for electric vehicle manufacturing. The Indian government has been providing various incentives and subsidies to attract foreign investors and promote the adoption of EVs. However, without significant investments from companies like BYD, achieving these targets might prove to be challenging.

Despite this setback, several other automakers, such as Tata Motors and Mahindra & Mahindra, continue to invest in the Indian EV market, showcasing their faith in its long-term potential. The Indian government’s efforts to improve charging infrastructure and reduce battery costs are crucial for attracting more investments and making electric vehicles more accessible to the masses.