After GST ‘snub’ to electric cars, BMW says government support crucial
NEW DELHI: Disappointed over plug-in hybrids being ignored for incentives in the upcoming GST, German luxury car maker BMW says it will be difficult to popularise green vehicles in India in the absence of government support.
Although the company welcomed the government’s idea of going for all-electric vehicles by 2030, BMW said lack of infrastructure and consumer’s concerns over getting stranded with pure electric vehicles when the charge runs out will be major challenges to overcome.
Under the GST rates, tax incidence on hybrid vehicles will go up to 43 per cent from the current level of an effective tax rate of 30.3 per cent.
“When the GST rates were announced, we were disappointed that the plug-in hybrids have been totally ignored,” BMW India President Vikram Pawah told.
In a plug-in hybrid electric vehicle, apart from a conventional petrol or diesel engine, there is a large battery that is recharged from an outlet by plugging in thus enabling it to drive extended distances using just electricity.
On the other hand, in a normal hybrid vehicle, the battery is charged from energy generated from running conventional engine and the range offered in electric drive mode is shorter.
“We would have liked plug-in hybrids to be included as part of the electric vehicles,” he added.
Pawah argued that lowering tax incidence on plug-in hybrids can lead to the much faster adoption of electric mobility in the country as it would help in addressing range anxiety concerns that customers have.
“If we want to achieve results earlier, then the approach should be plug-in hybrids leading to pure electrical vehicles. That will make the transition much easier but with current policies, it does not allow us to do that,” he added.
He asked the government to look “at plug-in hybrid as equal to electric vehicles for the transition phase” to accelerate movement towards green mobility.
BMW already sells both pure electric and plug-in hybrid vehicles across the world.
While welcoming the government’s plan to move towards completely electric mobility by 2030, Pawah, however, cited two major challenges towards achieving the goal.
“One, infrastructure needs to be set up to go purely electric and that will take time. It cannot happen immediately,” he said.
The second challenge is the concern among consumers of getting stranded in the middle of the road when the battery charge runs out, he added.
“So the transition to electric mobility from a customer viewpoint would be a bigger hurdle,” Pawah said.
The government is working on a scheme to provide electric cars on zero down payment for which people can pay out of their savings on expensive fossil fuels, for becoming 100 per cent electric vehicle nation by 2030.
When asked about the impact of a higher tax on hybrids on the company’s plans for the introduction of green vehicles, Pawah said: “Obviously we will have to wait till infrastructure is set up before we bring in the electric vehicles.”
The auto industry has already said that the increased tax incidence on hybrids is against the government’s long-term goal of promoting green vehicles in the country.