Lifetime Tax On High-End Cars And Jeeps Will Raise Overall Price Of EVs: Report South India leads the sales with close to half of the sales in the country at 45 per cent as this region predominantly has the presence of OEMs and component suppliers these manufacturing hubs act as a central force for the growth of EV sales.
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Advancements in lithium batteries have reduced the overall battery costs which in turn made electric vehicles (EVs) affordable for cost-conscious Indian consumers. However, with some states levying lifetime tax on high-end cars and jeeps, are supposed to increase the price of the vehicles, said a report.
According to the report which was released during India EV 2024, by Frost & Sullivan in association with Entrepreneur, in Chennai, stated, "Innovation in battery technology plays an important role in the Indian EV market. Advancements in lithium batteries have reduced the overall battery costs by 90.4 per cent in the past 15 years, which in turn made EVs affordable for cost-conscious Indian consumers."
However, it added, "Despite offering free registration and road tax exemption by states like Telangana and Tamil Nadu, some states like Karnataka has decided to collect a lifetime tax of 10% on high-end cars and jeeps which will ultimately increase the overall price of the vehicle."
Meanwhile, South India leads the sales with close to half of the sales in the country at 45 per cent as this region predominantly has the presence of OEMs and component suppliers these manufacturing hubs act as a central force for the growth of EV sales.
On the same line, Tata's first mover advantage in the EV space with its diverse portfolio from compact city cars to SUVs and strategic partnerships with domestic as well as international companies helped the OEM gain significantly leading market share in the country. These factors helped the OEM sell more than 55K vehicles in the year 2023.
According to the report, investment in EV infrastructure, growth of tech-savvy population in south Indian cities like Bengaluru, Telangana, and Chennai to continue to lead the EV sales in the next seven years with more than 47 per cent of sales contribution.
When we talk about the production capacity in India, the report has revealed that Hyundai is in the process of expanding its capacity and establishing an EV ecosystem in Tamil Nadu through an MoU with an investment of INR 200 billion in the next 10 years.
"OEM also intends to set up a battery pack assembly unit (annual capacity of 178,000 units) and in the next five years, the installation of 100 EV charging stations in Tamil Nadu will also take Place," it added.
JBM Group is in the process of producing and supplying automotive components and systems, electric vehicles, charging infrastructure, and EV aggregates.
Meanwhile, Mahindra & Mahindra is in the process of launching EV models in the same line as existing ICE models such as XUV.e, Thane, Scorpio.e, and Bolero.e between 2024 and 2025.
Speaking of the global key players, Tesla is presently in discussion for tax concessions amid the government's strict "Make in India" stance.
"The new EV policy gives import duty concessions to OEMs investing a minimum of $500 million in manufacturing units and allows import of up to 8,000 vehicles, costing 535,000 or more each, a year at a lower tax rate of 15%, compared to the 70-100% imposed on imported EVs before," the report added.
Sales share of electric vehicles in the central India is 8.40 per cent while Western and Southern regions of the country contribute to 22.4 per cent and 45.16 per cent respectively.
"Delhi and Haryana contributed more than 60 per cent in the northern region predominantly due to growing awareness of Co2 emission reduction. West Bengal and Odisha are the key contributing states in the region where West Bengal contributes more than half of the region's sales. Assam is the only state in the region with a three-digit unit sales contribution in 2023, which accounts for almost three-forth of the region, states like Mizoram and Sikkim yet to contribute," the report added.
