German luxury carmaker Audi has called for a reduction in import duties on electric vehicles in India, saying it will bring down prices of imported cars, thereby boosting domestic demand.
Audi, which sells five electric cars in the country, says it could only convince its parent firm to invest in local manufacturing if it is able to achieve a certain threshold of sales volume, which is only possible at a lower price tag.
“Import duties are high, so that is something where our request to the government is ...if something can be done regarding it. Even if there’s some relief for a 3-5 year period, it will help us achieve a certain minimum volume which would help us convince our headquarters to invest further in the country to start making the cars locally,” Balbir Singh Dhillon, Audi India head told PTI.
"If duty is less, probably we can sell more in the country," Dhillon said.
Last week, Audi launched two fully electric coupes -- the e-tron GT and the RS e-tron GT -- in India, taking the total portfolio to five e-tron variants. All these models are imported to the country.
"They (HQ) needs to believe that there is a demand so that they can think about further investments... There is a positive signal with e-tron range …We have to run for some time before we can go to them to reinvest in India," he said.
At present, the government charges 60 percent for importing electric vehicles priced below $40,000 and 100 percent for cars priced above $40,000.
"The biggest impediment is import duties, which at over 100 percent, are a stumbling block," said Dhillon.
Audi is not the only car manufacturer gunning for lower import duty taxes for electric vehicles. Tesla CEO Elon Musk has also been lobbying for lower import taxes in India. In July, Musk had tweeted, “import duties are the highest in the world” in India.
“Moreover, clean energy vehicles are treated the same as diesel or petrol, which does not seem entirely consistent with the climate goals of India,” he had said.
Volkswagen and Hyundai echoed Musk’s claim on import tariffs.