Lower GST critical for EVs in transition phase: Audi India

Balbir Singh Dhillon, Head, Audi India, said while the company is considering introducing multiple products in the segment, and exploring possibilities to assemble them locally, policy continuity is required to make investments viable.

Dhillon said subsidies are needed for the growth of the EV segment, “till the time we reach a decent penetration level”. “There is no science behind this, it’s just a gut feeling that maybe by the time we reach 50% penetration in the luxury space, we need that support (lower GST) and thereafter it is driven by itself,” he informed.

Audi currently register 3% of its sales from EVs, which it expects to increase to 40-50% by 2030. Dhillon said, “Probably by midterm..in the next 5-6 years from now, at least, we intend to go close to 40-50%.”

Dhillon said Audi would focus on petrol and electric vehicles while growing sales in the Indian market. The company does have plug-in hybrid vehicles in its global portfolio but have not considered them for launch in the country. “The direction of the government is clear. Hybrids are not part of our strategy (as of now)”, he said.

India currently levies GST of 5%, plus cess, on hybrids. The tax incidence on hybrid vehicles in the country totals 43%, while battery electric vehicles attract a tax of about 5%.Audi India plans to expand its EV portfolio, add affordable models, to clock nearly half of its sales from electric cars by the end of the decade. Dhillon said, the company’s current range of electric cars is tagged upwards of Rs 1.2 crore, while petrol vehicles comes for prices starting at Rs 50 lakh. “So there is a gap of Rs 70 lakh which we have to close. We will bring in more models. And at some point of time we would also have to start assembling them locally to reduce prices (of EVs). For that we need threshold volumes. But that’s something we have to do (eventually)”, Dhillon said. The company is yet to firm up plans as to which nameplates from its global portfolio of electric cars could be introduced in India over the next few years. Audi has already announced globally that beyond 2033, it will sell only battery-electric (BEV) cars.

Dhillon said the company aims for sustainable business growth in India, focusing on profitable operations that reinvest in new technology and better services. He said the domestic luxury car market has grown by around 8% in the first six months of the year.

“The festive season is expected to drive stronger growth in the second half of the year with overall sales expected to cross the 50,000 mark,” Dhillon said.

It would be the highest yearly sales figure so far with the best to date being 48,500 units in 2023.

Audi India on Thursday launched the new version of its flagship model Q8 at a starting price of Rs 1.17 crore (ex-showroom). The automaker also announced a sales milestone of 1 lakh cars in the Indian market in just over 15 years.