NEW DELHI — The head of Volkswagen Group unit Skoda’s India operations is calling for lower import duties on electric cars to help drive demand for clean vehicles, echoing Tesla’s recent pitch that has divided the country’s auto industry.
Cutting duties on EVs even to 25 percent from current levels as high as 100 percent would not pose a “big threat” to domestic players, but would help to drive investment, said Gurpratap Boparai, managing director of Skoda India.
VW Group has given Skoda the task of developing and building new cars for Skoda and other group brands.
VW Group’s luxury Audi brand began sales of three full-electric utility vehicles in India in July. The models start at $133,0000, putting them out of reach of most buyers in India where 95 percent of cars are sold for less than $20,000. VW Group’s Porsche brand will launch its Taycan EV in India next year.
Skoda and the VW brand are considering selling EVs in India, but would need to see lower import duties, stable policies on taxation and long-term incentives, Boparai said. Development of charging infrastructure will also influence its decision, he added.
India taxes fully-built imported cars, including EVs, as high as 100 percent, but the government is discussing a proposal to slash rates to as low as 40 percent, after Tesla’s appeals for a cut.
This has triggered fissures in the auto industry, with global players such as Daimler’s Mercedes-Benz and Hyundai Motor supporting the proposed cuts, but domestic rivals such as Tata Motors opposing them, saying they would hurt India’s push to increase local production.
“I’m not at all saying that local manufacturing should not be encouraged … but duty of 60 percent and 100 percent is prohibitively high at this juncture,” said Boparai, adding that to manufacture EVs locally there first needed to be more demand.