Balbir Dhillon, the head of Audi India, has emphasized the need for sustained government support, including the extension of import duty benefits, to foster the adoption of electric vehicles (EVs) in India. Dhillon made these remarks at Autocar Professional’s India EV Conclave, stressing that the transition to electric mobility is a marathon and requires long-term commitment from manufacturers, infrastructure providers, and the government.
Key Points
- Import Duty Support: Dhillon urged the government to extend the current import duty benefits for EVs for at least a decade. Presently, the government imposes a 70-100 percent import duty on completely built units (CBUs). Dhillon suggested that reduced import duties would facilitate market testing before considering local assembly.
- Marathon Approach to EV Adoption: Dhillon emphasized that the shift to electric mobility should be viewed as a marathon rather than a sprint. He underscored the importance of sustained actions from all stakeholders, including manufacturers, charging infrastructure providers, and the government. Dhillon's call for long-term commitment aligns with the gradual and strategic approach required for widespread EV adoption.
- Market Testing Before Local Assembly: Given the diverse options available globally, luxury carmakers like Audi prefer to test the market before committing to local assembly in India. Dhillon explained that the luxury car market's total industry volume is currently around 50,000 units, and testing the market is crucial before making significant investments in local production.
- Import Duty Challenges: Dhillon acknowledged the challenges posed by current import duties, especially for luxury cars priced above Rs 1 crore. Until the market reaches a certain threshold, the high import duties negatively impact sales. Dhillon's comments come amid the Indian government's ongoing review of import duty rates, aiming to attract foreign EV manufacturers.
- Global Commitment to Electric Portfolio: Audi has globally committed to transitioning to an all-electric portfolio by 2033. In India, Dhillon indicated that the current EV penetration is around 5 percent, with potential growth expected to be tenfold by the end of the decade.
- Positive Sales Trends: Audi's sales trends in India have shown positive signs for electric models. The SUV range witnessed a significant 187 percent increase in sales, while the performance and lifestyle cars, including the e-tron range, experienced a 42 percent growth in the January-September 2023 period.
Dhillon's advocacy for extended government support reflects the automotive industry's call for policy stability and incentives to accelerate the EV transition in India. The ongoing government initiatives, including the review of import duties, align with the broader objective of promoting sustainable and electric mobility in the country.