Volkswagen AG is joining Tesla in its appeal for India to lower import duties on EVs, Reuters reports. The goal is to drive demand for clean vehicles and Volkswagen India’s managing director of Skoda Auto, Gurpratap Boparai, shared some thoughts on this. He explained that cutting duties on EVs even to 25% from the current levels, which are as high as 100%, wouldn’t pose a “big threat” to domestic automakers. Further, it would help drive investment.
“The market for EVs has to be big enough for investments to come in, and for that, we shouldn’t be placing barriers,” said Boparai. Volkswagen Group has its eye on India for its VW and Skoda brands in particular, but as with Tesla, it needs lower import duties, stable policies on taxation, and long-term incentives before coming to India. Boparai added that the development of charging infrastructure will also be a key influence.
Daimler’s Mercedes-Benz and Hyundai Motor support the proposed cuts as well, while Tata Motors, which is a domestic brand, opposes them, claiming they would hurt India’s push to increase local production. Boparai pointed out that in order to manufacture EVs locally in India, there needs to be more demand.
“I’m not at all saying that local manufacturing should not be encouraged … but duty of 60% and 100% is prohibitively high at this juncture.” Although India is the world’s fifth-largest car market, Boparai expects that electrification will be slow compared with Europe and Chine due to the high cost of EVs and lack of local charging infrastructure.
There’s also a need for affordable EVs in India, and demand for that would begin with ride-hailing and corporate fleets. For now, he expects that the demand will start at the high end of the market and trickle down as it did here in the US with Tesla. “Establishing EVs is a lot of hard work. Not really having a clear roadmap and not reducing duties will slow progress towards EVs — both adoption as well as manufacturing,” he said.
It’s great to see Volkswagen adding its voice to Tesla’s for India to lower its EV taxes and duties. Hopefully, we will soon be reporting some good news coming from this joint effort.