JSW MG Motor India's Parth Jindal is seeking a more favourable GST regime for plug-in hybrid vehicles as it prepares to expand its new-energy portfolio, arguing that the current tax structure puts them at a disadvantage to battery electric vehicles despite their ability to run predominantly in electric mode.
"We would have loved to price the PHEV even better but because of 40% GST on PHEVs, our hands are tied. Its pricing will be shaped by the significantly higher GST applicable to hybrids. Anyway, we are competing against diesel which is also [at] 40%. So we have to focus on that," Parth Jindal, Director, JSW MG Motor India said.
The company has launched the MG Hector Tomahawk in electric vehicle (EV) and plug-in hybrid electric vehicle (PHEV) forms, with introductory ex-showroom prices starting at Rs 19.50 lakh and Rs 25.70 lakh, respectively.
While EVs attract 5% GST, PHEVs are taxed at 40%, making it difficult for the company to price the technology closer to its EV counterpart. Jindal said the industry is engaging with the government through the Society of Indian Automobile Manufacturers (SIAM) and believes there is scope for a differentiated tax treatment for technologies based on how they power the vehicle.
Jindal said the government currently distinguishes between internal combustion engine vehicles, strong hybrids, PHEVs, range-extended electric vehicles (EREVs) and battery EVs based on what actually drives the drivetrain.
“The government is very clear on the definition of what is an electric vehicle. First of all there is ICE, then there is strong hybrid which nothing but an improved ICE in terms of fuel efficiency. It's taking your mileage up from 12-13 kmpl to 22-24 kmpl with improved efficiency, but the drivetrain is being operated by the engine, so it is an ICE. Third is PHEV where the drivetrain can drive with the battery separate and the engine separate, but the engine can still drive the drivetrain, so in the definition of the government, and this is what we have understood after studying CAFE 3 norms as well, it is still classified as an ICE," he said. The company is, however, hopeful that the taxation framework could evolve as electrified technologies become more widespread.
Hector Tomahawk to Anchor MG's Next Phase
The company expects the two versions to be sold out within two weeks of the launch. For the hybrid version, Jindal expects to attract diesel buyers. "We've compared the total cost of ownership versus a diesel, because we want to attract the diesel crowd to the PHEV. So today EV penetration in India is 8%, we think we'll end at around 9-10% this year, that means we want to attract the 90% of the people who are not buying EVs to New Energy. So our competition is set against diesel, if you look at our pricing, you can compare it to the top end diesel automatics that are available in the market and we are very very competitive, with BaaS even more competitive," he said.
The company sees the C-segment SUV as an important white space, particularly as electric SUVs in the segment have grown significantly. “The thought process behind bringing a C-segment car was because that's what the brand has been known for and we have seen with the competition launches and EVs in the C-segment have gained volume to 10,000 cars per month and in C-segment, we are completely vacant," he said.
The company expects the Tomahawk to complement the Windsor, which has emerged as a key product in MG's EV portfolio. Jindal said the two models will form the backbone of the company's two main platforms, with MG looking to add products across segments as capacity becomes available. “We can bring in another model on it. We can bring in a smaller car on it. We can bring a bigger car on it. We can bring an MPV on it. I mean, the possibilities are amazing. Right now, our capacity is constrained," he adds. The company is also keeping the platform flexible enough to accommodate different powertrain technologies depending on market response and the regulatory environment.
JSW MG Motor India is investing heavily in expanding manufacturing capacity and increasing localisation. Jindal said the company is investing ₹3,500 crore at the MG level, while suppliers are investing another ₹2,500 crore, taking the total ongoing investment to around ₹6,000 crore.
“At MG level, we are investing 3,500 crores. That will take us from this year about 100,000 units to having a capacity of 220,000 units and we will get the localization up to 70% for two main platforms. One is the ADAPT platform and the second is the Windsor platform. Apart from us, our vendors are investing for MG on our behalf. So they are investing close to 2,500 crores," he said. The company's current capacity stands at 110,000 units, which is scheduled to rise to 160,000 units by March and 220,000 units by January 2028.
Localisation is also expected to improve profitability. MG plans to take localisation of its two main platforms to around 70% by the end of 2027, including local battery assembly. Cells, rare earth materials and some electronics will remain outside the localisation roadmap for now. “So by end of 27, when we're like 70% local in our two main platforms, which is the Windsor platform and the Hector Tomahawk platform, profitability should significantly improve. And with profits, you become more aggressive," he said.
75-80% Portfolio to be New Energy
The company remains bullish on EV adoption and expects new-energy vehicles to account for the bulk of its portfolio by the end of the decade. “I think we have stated very clearly that 75 to 80% of our portfolio will be new energy," he said.
Jindal said MG's ambition of becoming India's number-one new-energy vehicle player by 2030 remains unchanged, even as the company currently focuses on expanding capacity. “Our aspiration is to be a number one player in new energy vehicles by 2030. That continues to remain our aspiration," he said.
With the Hector Tomahawk, MG expects to reach full capacity and strengthen its position in the rapidly expanding EV market. The company expects to retain its number-two position in new-energy vehicles and is targeting a milestone of crossing 10,000 electric units a month.
“Our aim is to be running at full capacity and we believe that we will retain our number two position in new energy vehicles with the launch of this product," he said.
The company, meanwhile, does not plan to abandon internal combustion engines altogether. Instead, it intends to concentrate its ICE portfolio in segments where it believes it has a clear competitive advantage, while putting the bulk of its resources behind new-energy vehicles.