The Indian government announced that it will finally lower its extremely high electric vehicle import tax under the new policy unveiled on March 15, 2024. Now, German legacy automotive brand Audi is praising the new policy’s potential to bolster local production of premium electric vehicles, Press Trust of India reports.
Audi praises India’s new EV policy
Audi AG Vice-President, Sales Overseas Andre Konsbruck, commended the Indian government’s push for electric vehicles on Tuesday.
“The government seems to be very committed to sustainability and to the electric future.”
Andre Konsbruck, Audi AG Vice-President, Sales Overseas
VP Konsbruck noted that India might be the first nation to impose a specific standard with a focus on premium cars.
“So it might really accelerate the localisation of premium electric cars, which will automatically then also drive the demand.”
Andre Konsbruck, Audi AG Vice-President, Sales Overseas
VP Konsbruck contended that the local automotive industry’s premium segment will hit 1 lakh units per year by 2030.
Considering this business growth prospect, Audi is now considering establishing a local production in India to keep luxury car prices affordable. Such investment will also enable Audi to benefit from lower import taxes under the new policy.
For context, India currently inflicts an import tax of 70% or 100% on electric vehicles, depending on their value.
What does the new EV policy impose?
The Indian government officially approved an electric vehicle policy last week. As per the Ministry of Heavy Industries, India will reduce taxes on select electric vehicles imported by foreign car companies.
However, they must commit to investing at least $500 million in local manufacturing within three years. Electric vehicle makers that fulfill these key requirements will receive a lower tax rate of 15% for a maximum of 8,000 EVs per year. It is also worth noting that this import tax reduction is only applicable to models with at least $35,000 CIF value.
In addition, the new EV policy requires foreign brands to achieve a minimum Domestic Value Addition (DVA) of 25% by the third year of production and 50% within a maximum of five years.
“The Government of India has approved a scheme to promote India as a manufacturing destination so that e-vehicles with the latest technology can be manufactured in the country. The policy is designed to attract investments in the e-vehicle space by reputed global EV manufacturers.”
India’s Ministry of Heavy Industries
Audi’s plans for the Indian market
Audi plans to keep a flexible strategy by offering both traditional internal combustion engine-powered models and all-electric vehicles in India.
“So that means we will have a completely entire new ICE portfolio and we are going to have a completely new and wide range of electric cars..meaning we are completely flexible to react to the market demand.”
Andre Konsbruck, Audi AG Vice-President, Sales Overseas
When asked about Audi’s plans for BEV production in India, VP Konsbruck responded that they “are currently evaluating different scenarios.” He is hoping that they “will be able to make a decision soon.”
Audi expects electric vehicles to account for 50% of its overall sales in India by 2030. Globally, it aims to become an all-electric vehicle brand by 2033.
