Balbir Dhillon, the head of Audi India has stated that the government of India should extend import duty support for electric vehicles in order to popularise the zero-emission alternative.
- Government currently levies 70-100 percent import duty on CBUs
- Audi wants to test the market before beginning assembly in India
Electric Mobility should be a marathon
Speaking at our sister publication, Autocar Professional’s India EV Conclave in partnership with the Tamil Nadu government, Dhillon said the government support should “continue for at least a decade to achieve a good level of EV penetration.”
"BEVs or electric mobility has to be a marathon. This is not a sprint. All of us have to be patient. We have to have sustainable actions in place including from manufacturers, (those who provide) charging infra, and the government. We need some support on reduction of import duties which should help us test the market and then we decide how to move forward in terms of assembling these cars locally. That's been our request to the government,” said Dhillon.
The head of Audi India says the commitment from the government, vehicle makers and the infrastructure has to be “sustained” in tandem for “at least a decade” to ensure a sizable market is created.
Dhillon explained that the total industry volume in the luxury car market is still around 50,000 units and the models on offer are in large numbers. Given the wide options being made available globally, a luxury carmaker like Audi would like to test the market before beginning assembly in the country.
India currently levies import duty of 70 percent and 100 percent on cars that are completely built units, depending on the ticket.
Hence, until the market does not reach a certain threshold, the import duties do play a kind of “negative role” at present, and hence, “we are not able to sell enough cars, because most of the cars that we are selling, are above Rs 1 crore for example,” he elaborated.
Government is currently reviewing import duty rates
Dhillon’s comments come at a time when the Government of India is reviewing its import duty to attract foreign EV makers like Tesla to enter the market. The likes of Tesla and VinFast may be able to set up bases in the country with lower volume fully built cars at a concessional import duty of around 15-20 percent, much lower than the prevailing 100 percent duty that such imports normally attract if the proposal goes through.
The Indian government and Tesla are said to be close to reaching an agreement that will not only allow the US EV maker to sell models made overseas, but also set up a manufacturing plant in India.
Audi EV goals
Globally, Audi has committed to moving to an all-electric portfolio by 2033. As for penetration in India, Dhillon says the level at present is around 5 percent, which could potentially grow ten-fold by the end of the decade.
Sales of Audi’s SUV range have increased by 187 percent and its performance and lifestyle cars including the e-tron range have witnessed a 42 percent growth in the January-September 2023 period. 37 percent of sales in January-September 2023 (2,056 units) came in Q3 (July-September 2023).
With inputs from Ketan Thakkar.
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