BMW Urges Govt to Keep 5% EV GST, Warns of Industry Harm

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AuthorAnanya Iyer|Published at:
BMW Urges Govt to Keep 5% EV GST, Warns of Industry Harm
Overview

German luxury automaker BMW is lobbying the Indian government to maintain the 5% Goods and Services Tax (GST) on electric vehicles (EVs) in the upcoming Union Budget. The company argues that an increased tax rate would hinder industry growth, citing India's low EV penetration and high manufacturing costs, despite BMW's own substantial EV sales surge.

German luxury car manufacturer BMW Group India is urging the government to keep the Goods and Services Tax (GST) on electric vehicles (EVs) at the current 5% rate in the upcoming Union Budget. The company warns that any upward revision would significantly jeopardize the nascent EV industry's growth trajectory in the country.

Growth Metrics and Industry Context

Hardeep Singh Brar, President and CEO of BMW Group India, emphasized the critical juncture for EV adoption. He pointed out that India's EV penetration in the passenger vehicle market stands at a mere 4%, far below developed nations' over 10% and China's 40%. Brar stressed that increasing taxes now, while EV adoption is still gaining traction, would be detrimental. The higher cost of EV manufacturing, estimated to be 40-50% more than internal combustion engine (ICE) vehicles primarily due to battery prices, further strengthens BMW's argument. Until battery costs stabilize, maintaining the current GST is crucial for affordability and wider consumer acceptance. Despite these concerns, BMW Group India has registered impressive growth. Electric car sales for the company have surged over 200% recently. Overall, the group saw its car sales increase by 14.4% year-on-year, delivering 18,001 units across its BMW and MINI brands. BMW's long wheelbase models and SUV segments, in particular, showed robust performance, with sales growing significantly.

Future Plans and Investments

Looking ahead, BMW plans an aggressive product offensive, aiming to launch 10 new models, including six entirely new vehicles and four with substantial updates, this year. The company is also focused on expanding its electric offerings, planning three new EV models that are expected to boost its EV penetration to approximately 25%. This strategy underscores BMW's commitment to the Indian market and its push for sustainable mobility. The company is also investing ₹400 crore in expanding its retail network and modernizing dealer facilities across India.

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