Sri Lanka’s electric vehicle market has been jolted by a major controversy involving a large consignment of BYD electric vehicles, amid accusations of underreporting motor capacity to evade import duties. Over 1,000 brand-new BYD electric vehicles, currently held at the Colombo Port, are under investigation after Customs authorities raised red flags over discrepancies in motor power ratings. The issue has now sparked confusion among buyers, with questions emerging over tax liabilities, software tampering, and the legality of the imports.
At the heart of the issue is the allegation that the vehicles were declared as having 100-kilowatt (kW) motors—qualifying them for a lower tax bracket—when in reality, they may be equipped with 150 kW motors. This discrepancy significantly affects the import duty calculation, raising concerns of large-scale tax evasion and consumer deception.
Minister of Labour and Deputy Minister of Economic Development Anil Jayantha, addressing the matter during a televised interview, confirmed that the inconsistency came to light following complaints from used vehicle importers. “They pointed out that used vehicles must declare the true motor capacity—often 150 kW—resulting in higher tax. But these brand-new BYD vehicles were cleared on the basis of 100 kW documentation,” he said.
Jayantha said he was presented with both sets of documents and subsequently engaged in discussions with Sri Lanka Customs. The minister noted that an investigation is underway to determine if the actual motor capacity was masked through software or misrepresented through forged documents.
“Tax is imposed based on motor capacity, not output,” he said. “There are serious concerns about whether the software was used to limit motor performance or if the documentation was falsified. Customs will conduct technical verification.”
The controversy has also sparked anxiety among customers who pre-ordered these vehicles. Jayantha acknowledged this and said that in certain cases, financial institutions may recover payments through bank guarantees—if wrongdoing is proven. However, he cautioned that there is no guarantee the importing company will extend such protections to buyers.
Adding to the complexity, Jayantha stated that Customs can review previously cleared shipments for similar discrepancies. “If any violations are found, the importer—not the customer—will be held liable for penalties and unpaid taxes,” he clarified.
As investigations unfold, the case has raised broader questions about transparency in EV imports and the need for stricter verification processes to protect both state revenue and unsuspecting consumers from potential fraud.
