Audi India supports continuing low GST on EVs to boost sales and adoption, aiming for 40% EV sales by 2030.
Audi India is lobbying for the extension of reduced Goods and Services Tax (GST) on Electric Vehicles (EVs) in the country. For now, EVs are taxed at 5% GST, the lowest GST rate among all vehicle categories in the country. Audi, affiliated with Volkswagen Group, feels that maintaining these lower tax rates is absolutely critical to put a fast rod on electric car uptake, and hence, help shift the transportation sector towards the cleaner path.
Current Market Status
Even though the GST rates have been friendly for penetration, the percentage of EVs in India is still below international levels. The competitors that are operating in the luxury EV segment include Mercedes-Benz and BMW while Audi has a minimal proportion of EVs in its overall sales in India with a mere 3%. Audi plans on achieving its vision of having at least 40 percent of revenues from electric vehicles over the next six years. In the wake of this, Balbir Singh Dhillon, Head of Audi India stated that sustained support especially in the form of lower GST is a must for the realization of this objective. Dhillon stated, “There is no internal economic logic in this, it is only an instinct which says that by the time we want to achieve 50% in the luxury electric segment, we would require that.”
Government Subsidies and Future Projections
There are numerous incentives in India for both the makers and the consumers of EVs, such as the FAME scheme to encourage localized production of EVs. However, hybrid vehicles are subjected to a GST rate of 43% even when they are environmentally friendly. The German car maker Audi also wants to increase in India its range of electric vehicles but has excluded the hybrid or plug-in hybrid ones. At the moment Audi has launched three products in India namely the Q8 e-tron, Q8 e-tron Sportback, and the e-tron GT. The firm has greater ambitions for its EVs, with an objective of a 40%-50% share of the market share by 2030.
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