What began as a customs dispute over BYD electric vehicles has now escalated into a broader investigation into multiple EV brands entering Sri Lanka. Authorities have detained over 2,000 BYD units including the popular ATTO 3 and Dolphin over suspicions that importers under-declared motor capacities to avoid higher excise duties.
Customs officials allege that vehicles declared with 100kW motors may in fact carry 150kW hardware, potentially triggering tax gaps of up to Rs. 4.5 million per unit. The issue has drawn parliamentary attention, with MP Mujibur Rahman questioning whether political or business ties enabled certain importers to bypass scrutiny.
But BYD may not be alone. Other brands such as Deepal, Tata, MG, Dongfeng, and GAC are now under review. Many of these models have global variants with higher motor outputs than those declared locally. Customs has confirmed that a technical committee will begin testing these vehicles to verify actual specifications.
The controversy stems from the use of software-limited motors, which allow manufacturers to cap performance without altering hardware raising complex questions about how motor capacity should be taxed.
As Sri Lanka’s EV market surges, the outcome of this probe could reshape import practices and pricing for thousands of consumers.
| Model | Declared in SL | Known Global Variant |
| Deepal S07 | 99kW | 160kW (Australia) |
| Deepal L07 | 99kW | 190kW (Thailand) |
| Tata Tiago | 48kW | 55kW |
| Tata Currve | 98kW | 110kW / 123kW |
| MG ES5 | 99kW | 125kW / 170kW / 180kW |
| Dongfeng Box | 49.5kW | 70kW (Malaysia) |
| GAC Aion Y | 100kW | 150kW |
Given the technical issues BYD Automotive is facing in Sri Lanka regarding its drive motor capacity, China’s electric vehicle (EV) market is undergoing a notable shake-up as industry giants Tesla and BYD report declining sales, while emerging players gain momentum.
Tesla’s China sales fell 5% year-over-year in August, marking a rare dip for the U.S. automaker in its second-largest market. BYD, China’s domestic EV powerhouse, saw an even sharper decline of 14.3%, attributed to economic headwinds, urban saturation, and aging product lines.
Meanwhile, newer entrants like Xiaomi and Zeekr are surging ahead, leveraging tech-driven innovation, competitive pricing, and fresh branding to capture market share. Analysts say consumer preferences are shifting toward smarter, more affordable EVs that integrate seamlessly with digital lifestyles.
The downturn for Tesla also coincides with growing scrutiny of Elon Musk’s public persona, which some experts believe may be dampening brand appeal in Asia.
As China’s EV sector matures, the battle for dominance is no longer just about horsepower, it’s about adaptability, affordability, and digital integration.
A Call for Transparency and Reform
As Sri Lanka positions itself as a rising player in the global EV transition, this unfolding investigation is more than a customs dispute it’s a litmus test for regulatory integrity, consumer protection, and industrial accountability.
For readers, it’s a reminder to stay informed and demand clarity when investing in new technologies. For policymakers, it’s an urgent cue to modernize excise frameworks, strengthen technical oversight, and ensure that innovation doesn’t outpace regulation.
If Sri Lanka is to embrace a sustainable, electrified future, it must do so with transparency, fairness, and a commitment to public trust starting with how we define and tax the very engines of that future.
(sources Economy Next, South China Morning Post, Bloomberg.com)
—Sourced Agencies
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