BMW calls for retaining 5% VAT on EVs in the upcoming budget

BMW calls for retaining 5% VAT on EVs in the upcoming budget

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German luxury car maker BMW on Thursday made a plea for retaining the current 5 percent GST (Goods and Services Tax) on electric cars in the upcoming Union Budget, saying any further increase could be detrimental to the sector.Sales of electric cars increased by more than 200 percent in 2025, while total car sales of its two brands – BMW and MINI – grew 14.4 percent year-on-year to 18,001 units.

The group said it also plans to launch 10 models this year, including six new ones and four with major changes.

“I think the government has done a fantastic job managing the economy as a whole and making sure we don’t fall below the 7 percent threshold, which is very crucial for the country.”I don’t think we have any more expectations from them (the government). The only request, I think, would be not to touch the GST slab of EVs because it keeps coming back that GST will be increased on these vehicles. (If it happens) I think it will be very damaging,” Hardeep Singh Brar, president and CEO of BMW Group India, told PTI in an interaction.


Noting that the EV share in the overall passenger car market was just 4 per cent, compared to over 10 per cent in developed countries and 40 per cent in China, he said: “We are probably one of the lowest (in terms of EV penetration). So until we reach a certain inflection point where people start adopting electric vehicles, it (increasing the GST) will be quite detrimental.”

Moreover, the cost of producing electric vehicles is still about 40-50 percent higher than that of ICE vehicles due to battery prices, he said. “Till the time battery costs come down, I think it (increasing GST) will be very detrimental to the industry. Therefore, the government’s request is to keep the GST for EVs at the same level of 5 percent,” he added.

He called 2025 an “absolutely phenomenal” year for the group and said the business had grown 13-14 percent since the Covid-19 pandemic, faster than the sector as a whole.

“Compared to the rest of the market, which has an average growth rate of only 5 to 6 percent, this (over 14 percent growth) is more than double the average growth rate, clearly showing that BMW has taken a huge lead over the rest of the market,” Brar said.

He also said that about a third (6,000 units) of the total 18,001 cars sold last year actually came from the December quarter, which was the festival season, after the GST 2.0 reforms.

BMW Group India includes BMW, the car brand MINI and the motorcycle brand Motorrad.

At group level, the company sold 23,842 vehicles – “17,271 units of BMW, 730 units of MINI brand cars and 5,841 motorcycles in 2025”.

In the BMW range, the company said long-wheelbase models continued to perform well, growing more than 162 percent year-on-year with sales of 8,608 units, adding that long-wheelbase models now contribute 50 percent to BMW sales, compared to 29 percent last year.

The 3 Series was the best-selling premium sedan in its segment, while SUV sales grew by more than 22 percent at 10,748 units.

The motorcycle segment was further strengthened with the introduction of the BMW R 1300 GS Adventure and the high-performance BMW S 1000 RR, the company said.

Brar said regularly refreshing models, launching more than ten products per year since the past four years, and upgrading the network have helped the company to continuously achieve higher sales figures since the past four years.

On EV sales, he said the company will definitely grow at a better pace than its regular ICE cars this year.

“Our penetration is around 21 percent, while in the fourth quarter it rose to 23 percent thanks to better offerings.”

He said the company plans to launch three new electric car models, which will increase the EV penetration level to around 25 percent.

“So if we grow 10 percent or more overall, I think it will be very strong double-digit growth in the case of electric vehicles,” Brar said.

The company started its product offensive in MINI from December and launched the convertible version, which was a great success with all MINI convertibles sold in the first month itself, Brar said.

This year we will launch ten new products, cut MINI special editions and double our volumes with the brand by 2026, he said.

He also said the company is expanding its retail network to the smaller cities, which now includes 40 cities with around 100 touchpoints. The country wants to add another ten cities next year.

“We, along with our dealers, are investing Rs 400 crore in the Retail.next project, which will enable dealers to sell BMW, MINI and BMW Motorrad products under one roof,” Brar said.

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