New Delhi:
German luxury car maker Audi on Monday said it will go ahead with its plans to bring its electric SUV e-Tron later this year despite hike in customs duty in the Budget. The company, however, said it is seeking clarity on some regulatory issues like battery disposal as it tries to firm up long-term strategy for electric vehicles in India.
“In terms of what has come in the Budget, I don’t think it is going to impact our plans … There is no doubt that we are going to move towards electrification. We will bring e-Tron. This will come sometime later this year,” Audi India head Balbir Singh Dhillon told PTI. He was responding to query on whether the company’s plans for launching e-Tron will be altered in the wake of hike in customs duty on imports of EVs as announced in the Budget for 2020-21.
Import duties on fully imported commercial EVs will go up to 40 per cent from 25 per cent, while the same on semi knocked down electric passenger vehicles will go up to 30 per cent from 15 per cent. Import of completely knocked down units of electric vehicles will attract import duty of 15 per cent, up from 10 per cent earlier. These changes come into effect from April 1.
“In any case we are going to bring (e-Tron) 100 per cent imported. The segment that we belong to, the duties are already very high,” Dhillon said. He further said e-Tron will not be a volume car. “We will not be selling it in thousands unless there is a very substantial effort by the government where import duties are substantially reduced,” he said.
Ruling out producing the vehicle in India, he said, “Till we reach a critical mass it is difficult to manufacture in India. We need to reach a minimum critical mass to manufacture in India. Till that time it will remain imported fully built unit, of course with high duty.” While there would be limitations to some extent due to high import duties, Dhillon said there is also an advantage as there is only 5 per cent GST (on EV) and some states like Delhi and Maharashtra where there is no registration tax.
“That definitely helps,” he added. Stressing that preparation is key before launching the EV, he said right now the company’s focus is on training manpower and making sure about readiness of spare parts and components.
Seeking clarity on key regulations on EV ecosystem, Dhillon said today the rules are not clear over disposal of discarded EV batteries. “Is there a regulation that exists today? I am not sure. Does it need to be re-exported to the country of origin or can it be disposed of in the country (India). There are still some unanswered questions,” he said.
Commenting on Audi’s preparation for introducing the electric SUV, he said, “When we bring the car we have to be sure that at least we know our risks and potential and we are clear what is available what is not available. This is what we are evaluating now but definitely moving in that direction.” Apart from EVs, Dhillon said the government must also consider supporting plug in hybrid vehicles (PHEVs) as these are the intermediates to the journey from internal combustion engine technology to fully electric vehicles.
“Ideally the government should do something for PHEVs because it is a step towards electrification. It is the first step that you bring people from ICE to PHEV and eventually take them to electric cars,” he said.
