Launching EVs in India depends on taxation: Mercedes-Benz


Mercedes-Benz can launch electric vehicles in India by 2019, but it all depends on a favorable taxation structure for such vehicles, said the India division MD and CEO Roland Folger, speaking to PTI.

The company is developing several electric vehicles for global markets and expects that by 2022, around 20-25 per cent of its total sales would come from electric vehicles (EVs). Recently, Daimler launched Denza 500 electric vehicle for the Chinese market.

“We believe in electric vehicles. Globally, we are putting in resources to develop EVs. By 2022-24, we are going to have 15-20 completely new such models. We strongly believe that 20-25 per cent of our volume by 2022 might be EVs. We are gearing up in that direction globally. In India, it all depends again on taxation,” Folger said.

He added that currently there is no inherent interest to switch to EV segment among buyers in the country and that to make the segment attractive there is a need to have such vehicles on the ground.

“By 2019, we can bring in our first electric vehicle (In India) and with attractive range, but there are lots of things in India which we need to clarify,” Folger said.

“We would need a solution which lets us bring in the CBU vehicles. You need to start small and then grow organically. You cannot do that if the only benefits available currently would go into locally manufactured vehicles,” he added.

He said that the fully imported completely built units (CBU) of EVs should be treated at par in terms of taxation with locally manufactured vehicles supporting green technology.

“When we reach a certain volume, say 600 units on CBU basis, then we can turn it into local manufacturing as well,” Folger added.

He said that currently launching an EV does not make sense as even a mid-sized EV would be as expensive as a S-Class sedan.

Under the current GST regime, EVs attract a tax of 12 per cent. Imported cars on the other hand attract custom duty of 60 per cent and 100 per cent depending upon the price and size of the engine. In the Budget for 2018-19, the government has also increased customs duty on CKD (completely knocked down) imports of motor vehicles, motor cars, motor cycles from 10 per cent to 15 per cent.

Furthermore, duty on CBU (completely built units) imports of motor vehicles (trucks and buses) was hiked from 20 per cent to 25 per cent.

Also Read: Plan for all-electric cars by 2030 not viable – Mercedes India Chief

Source: PTI via ETAuto

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