Audi India is making a strong case for lower taxes to stimulate growth in the luxury electric vehicle (EV) segment. According to Balbir Singh Dhillon, the head of Audi India, the company is considering the introduction of more electric car models in the domestic market. However, Dhillon emphasized that policy continuity and subsidies are crucial to making investments viable, especially until the EV segment achieves significant market penetration.
The current tax structure in India poses a significant barrier to the adoption of luxury EVs. While battery electric vehicles attract a Goods and Services Tax (GST) of about 5%, hybrid vehicles face a much higher tax incidence of around 43%. Audi India is advocating for a reduced GST rate of 5% on EVs, similar to the rate for battery electric vehicles, until the luxury EV segment reaches a penetration level of 50%.
Dhillon highlighted that the luxury EV market in India is still in its nascent stages and requires supportive policies to grow. The company is exploring the possibility of assembling EVs locally, which would not only reduce costs but also make the vehicles more competitive in the market. However, this would require a stable and favorable policy environment to ensure the viability of such investments.
The demand for luxury EVs is expected to increase as consumers become more environmentally conscious and as the infrastructure for EV charging improves. Audi India’s push for lower taxes is part of a broader strategy to make luxury EVs more accessible and affordable for Indian consumers, thereby driving growth in this segment.
