Volvo Cars To Change Customers' Perception Of EVs: India MD For Volvo Cars, it's not about market share. It's more about how do we change the mindset of people to buy more electric cars, says Jyoti Malhotra, MD, Volvo Cars India

Volvo Cars plans for the Indian market in 2025 seems promising. It has something for electric vehicles (EVs) and internal combustion engine (ICE) lovers. Volvo, which operates in the luxury car market, will launch the much awaited EX30 by the end of 2025. "We have promised that we'll bring one electric car every year. So this year we plan to bring the EX30, a compact SUV, towards the end of the year and that's going to be our first new generation electric car in India. We are focusing equally on ICE vehicles and will bring the XC90, coupled with its mild hybrid form soon in 2025," said Jyoti Malhotra, MD, Volvo Cars India.

The Volvo XC90 is considered an ICE vehicle, although most models available today are equipped with a mild-hybrid system, a step towards electrification but still primarily relies on a gasoline engine for power.

Volvo Cars controls almost 40 percent of India's luxury EV segment. "It's a happy place for us to be in, we aim to be the leader here. Moreover, almost 25 per cent of our overall contribution is already coming from EVs in India," he added. Right now, the focus is on the two existing electric cars in the market, the EC40 and EX40. These models are part of Volvo's new naming scheme for its electric range. "We look forward to a good year. From an overall perspective, I still believe that the market is a little subdued," he said.

India's luxury car market crossed a significant milestone, surpassing 50,000 units for the first time in 2024. "Things are going to change very soon on a midterm basis. By 2028 to 2030, volumes will double. I believe from now till next five to six years, we'll see the market size doubling. This is what excites us and we are preparing accordingly," he explained.

By 2030 the goal of the global Volvo team was to be fully electric. Now it has been revised to bring in some plugin hybrids as well. In India, the direction remains the same. The tax structure here is such that plug-in hybrid electric vehicles (PHEVs) are subject to a 28 per cent Goods and Services Tax (GST). However, the effective tax rate on hybrid cars is around 48 per cent due to other taxes and cesses, which does not make it feasible for the market. "We have the capability to bring a conducive environment, but right now, the government is rightly pushing towards EVs. All our cars are electrified in some way, our ICE vehicles come with mild hybrids and we will continue to focus more on EVs. This is how we are going to play here unless there is a change in government directives," he said. The current tax on EVs is around five per cent.

While over 1.9 million EVs (including two-wheelers) were sold in 2024 — representing a 24.5 per cent jump from 1.5 million in 2023 — this points to a slowdown compared to the 50 per cent growth seen between 2022 and 2023. EV penetration rose to 7.40 per cent in Calendar year (CY) 2024 from 6.38 per cent in CY 2023. In the luxury segment, EV penetration was about 8 per cent. "If you look at the penetration in the luxury segment where we operate, it's already close to 8 per cent. Our sales are mostly driven by progressive people who care about sustainability. The simplicity of Scandinavian design is another factor that helps in retaining customers. We wish to attract more of them," he shared.

When purchasing a vehicle, we often think about more than just the initial cost. Resale value and depreciation are vital considerations. EVs generally depreciate by 40-50 per cent in three years. Factors like model, battery condition, and market demand for used EVs influence the exact rate.

"After a year or two, the life of an electric car doesn't end, it is going to survive much longer. As people understand this, I think resale value of EVs is going to be stronger," he said.

When asked about Volvo Cars 2025 target, he said that the company's milestone is India's growth story. "We are working at the backend to ensure we drive growth. Growth wheel doesn't mean volume, numbers or market share. It's about contributing to make India more electrified and changing the mindset of people to buy more electric cars," he explained, adding that range anxiety is in peoples' minds, and by experiencing an EV this perception will change.

Almost two per cent of cars bought in 2024 were EVs. Volvo sold 442 electric cars in 2024 compared with 570 in 2023, which is a fall of 22 per cent, according to data from Federation of Automobile Dealers Associations (FADA). "We believe in 2025 EV adoption in India will reach a new momentum. To capitalise on this, we are strategically planning the new launches," he concluded.