EV transition is a marathon, Govt support needed for a decade – Balbir Dhillon, Head, Audi India

Balbir Dhillon, the head of Audi India has urged the government of India to extend import duty support for electric vehicles in order to popularise the zero-emission alternative.  

Speaking at the Autocar Professional’s India EV Conclave in partnership with the Tamil Nadu government, Dhillon said the government support should “continue for at least a decade" to achieve a good level of EV penetration.

"BEVs or electric mobility has to be a marathon, it’s not a sprint. All of us have to be patient. We have to have sustainable actions in place including from manufacturers, charging infra companies and the Government, including the State Government for low registration costs. We need some support on reduction of import duties which should help us test the market and then we decide how to move forward in terms of assembling these cars locally. That's been our request to the Government,” said Dhillon.

The head of Audi India says the commitment from the Government, vehicle makers and the infrastructure have to be “sustained” in tandem for “at least a decade” to ensure a sizable market is created.

Dhillon explained that the total industry volumes in the luxury car market are still under 50,000 units and the models on offer are in large numbers. Given the wide options being made available globally, a luxury car maker like Audi would like to test the market before beginning assembly in the country.

“The reduction in duty will help us as we are currently studying the market and thereafter will take any action related to local assembly ," he added. 

India currently levies import duty of 70% and 110% on cars on completely built units, depending on the ticket size.

And hence till the time the market does not reach a certain threshold, the high import duties do play a kind of “negative role” at present, and hence, “we are not able to sell enough cars, because most of the cars that we are selling, are above Rs 1 crore for example,” he elaborated. 

Dhillon’s comments come at a time when the government of India is reviewing its import duty to attract foreign EV makers like Tesla to enter the market.

The likes of Tesla and VinFast may be able to set up a base in the country with lower import fully built cars at a concessional import duty of around 15-20 percent, much lower than the prevailing 110 per cent duty that such imports normally attract, if the proposal goes through.

The Indian government and Tesla are said to be close to reaching an agreement that will not only allow the US EV maker to sell models made overseas but also set up a manufacturing plant in India.

Audi globally has committed to move to an all electric portfolio by 2033 as for penetration in India, Dhillon says the penetration at present is around 5 percent, which could potentially grow ten-fold by the end of the decade.

"The early signs are positive, of course this range anxiety and all the factors definitely exist today but the technology coming by, we have the cars with 600 km WLTP range today. These things will go by," he added. 

Sales of Audi’s SUV range have increased by 187% and the Performance and Lifestyle cars including the E-tron range have witnessed a 42% growth in January-September 2023 period. Thirty-seven percent of the sales in January-September 2023 (2,056 units) came in Q3 (July-September 2023).

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