How China’s ‘big winner’ BYD conquered Sri Lanka’s high-tariff car market
Posted on July 27th, 2025
Courtesy The South China Morning Post
After a five-year import ban, BYD shrewdly adapted its models to circumvent sky-high taxes, making electric vehicles affordable again
Published: 5:00pm, 26 Jul 2025
Updated: 5:00pm, 26 Jul 2025
A BYD Seal electric vehicle on display in a showroom in Pakistan. BYD accounted for roughly 90 per cent of fellow South Asian nation Sri Lanka’s EV sales in May. Photo: Reuters
Aggressive pricing, shrewd tax engineering and a trusted local partner have propelled China’s BYD to a commanding position in Sri Lanka’s electric vehicle and hybrid market, disrupting a sector long constrained by import restrictions and setting the stage for dramatic expansion.
Sri Lanka’s car market, starved of new imports for nearly five years under a sweeping ban imposed in the lead up to the economic crisis of 2022 to stabilise foreign reserves, reopened in February as the government lifted restrictions. But a new tariff regime – with excise duties reaching 300 per cent, 18 per cent value-added tax, and luxury taxes of up to 100 per cent – has sent car prices soaring.