Import duty cut for a limited time will fast track new tech: BMW India head

A reduction in import duty on electric cars even for a limited two to three years will help spur demand, fast track adoption of new technologies and give a window to the manufacturers to test the market before commencing local production, according to Vikram Pahwa, president and CEO, BMW Group India.

Joining other luxury carmakers including Mercedes, Audi and JLR in the EV race, BMW India plans to launch three electric cars— starting with the flagship all-electric SUV iX in the next 30 days followed by the MINI electric, a luxury hatchback in three months and BMW i4 sedan in six months.

All the models will be imported, attract a high duty and hence command a super-premium price positioning. India levies an import duty of 100 per cent on imported cars if the CIF (cost, insurance and freight) value exceeds $40,000 or has a petrol or diesel engine with a displacement of greater than 3,000 cc and 2,500 cc, respectively. For cars that have a CIF value of less than $40,000, the duty is 60 per cent.

Global luxury carmakers including Tesla Motors have been lobbying with the Indian government to reduce duties on the imported EVs.

“What we are asking for is a support mechanism to fast track new technologies by way of a duty cut for a limited time frame for limited volumes,” Pahwa told Business Standard.

For instance, if a manufacturer is given permission to import 10,000 EVs at a reduced duty within three years it allows the company to bring the technology, create enough traction and test the market and then take investment decisions for local production accordingly, he said. “I think we are being very reasonable, we totally understand that make in India is the right way.”

In the beginning of this year, BMW Group India (including MINI and BMW Motorrad) had announced plans of launching 28 products. The launch of the three pure EVs is the “next major step,” said Pahwa, adding that the new models have given the Munich headquartered firm “fantastic results.”

BMW has sold 6987 cars and SUVs in the first ten months of the current calendar year, which is a 38.5 per cent y-o-y growth. Even the motorcycle business, Motorrad has seen the sales jump 195 per cent year on year to 4225 units in the same period, doubling from last year.

This is even as the semiconductor shortage has been delaying deliveries. BMW globally, owing to its flexible production system, has managed the shortage better than its rivals, it does expect the shortage to continue over next year as well, said Pahwa.

BMW India will give a home charging kit along with every EV model. It will be a 11 kW AC charger capable of 100 per cent in about 7 hours with 100 kms added range in 2.5 hours which can be installed either at home or office.

It would also install 50 kilowatt DC fast chargers at all touch points at dealer networks in 35 cities in India. The company is also joining hands with energy companies and charging infrastructure providers for easy access to its customers, said Pahwa.

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