BYD Co, China’s biggest electric vehicle maker, has submitted a $1 billion (₹8,200 crore) investment proposal to build electric cars and batteries in India through a joint venture with Hyderabad-based Megha Engineering and Infrastructures.

What Happened? The longer-term plan for the Warren Buffet-backed carmaker includes manufacturing a full range of BYD-branded EVs in India, from hatchbacks to luxury models, sources told Reuters.

BYD’s plans could pose a challenge to the dominance of Elon Musk-led Tesla’s dominance in the EV market and expand its global presence, with India being the world’s third-largest car market. It was previously reported that Tesla is in talks with the Indian government to invest in building a car factory in the country that will produce up to 5 lakh electric vehicles a year, with prices starting from ₹20 lakh.

See Also: PM Modi Honoured With France’s Highest Award By Emmanuel Macron

Tesla is also reportedly in discussions over bringing its own supply chain to the country and seeking clarity over incentives and tax breaks.

BYD’s investment, if approved, would position the company in all major global car markets except the US. The firm has already invested $200 million (₹1,640 crore) in India and currently sells the Atto 3 electric SUV and e6 EV to corporate fleets. The company plans to launch its Seal luxury electric sedan in India this year.

While the exact production capacity proposed by BYD is unclear, the company aims to scale up to manufacturing 100,000 EVs annually in India over the next few years, sources told the business publication. They added that the firm may initially opt for shipping vehicles in parts for local assembly as they establish a robust supply chain and that the investment proposal also includes plans for setting up charging stations, as well as research and development and training centres in India.

Read Next: India Opts Out of Imposing Anti-Subsidy Tax On Some Chinese Steel Imports