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Strong hybrid or plug-in hybrid cars can be a stepping stone towards India’s aim to reduce carbon emissions, but the country’s focus should remain on electric vehicles (EVs) with regard to low taxes and incentives, a senior official of the BMW Group stated on Wednesday.
The German automobile company sells 24 models in India — one plug-in hybrid car, six EVs, and 17 internal combustion engine (ICE) cars.
Plug-in hybrids can be used as a stepping stone towards full electrification in some cases, said Jean-Philippe Parain, senior vice-president at the BMW Group for various regions, including Asia-Pacific, Eastern Europe, Middle East and Africa.
“Plug-in hybrids can be used for transition in some cases, where customers have to travel for longer distances, and want to be released from possible range anxiety. We are proposing this (plug-in hybrid) technology in many countries… but if I speak for India, I would say that the full focus should be on transition to BEVs (battery-run EVs),” Parain told reporters here, after launching electric scooter CE 04, electric car Mini Countryman, ICE car Mini Cooper S, and ICE car 5 Series Long Wheelbase.
As India aims to be carbon neutral by 2070, automakers are divided over the best path ahead. Japanese giants like Maruti Suzuki and Toyota are pushing for tax cuts on strong hybrids, arguing that EVs alone can’t carry the emissions reduction load. But homegrown players like Tata Motors and Mahindra & Mahindra have opposed such tax cuts, insisting that only a full-throttle EV push can truly decarbonise India’s roads.
The divide within the auto industry recently came to the fore after the July 5 order of the Uttar Pradesh government to waive registration tax of 8-10 per cent for strong hybrid and plug-in hybrid vehicles.
EVs in India are charged just 5 per cent GST vis-a-vis hybrid cars’ 28 per cent. Parain said, “If you ask me, the strongest incentives from the state should be for EV adoption. That is where the effort is the biggest, especially in the beginning.” BEVs in India are still a small market. “I think you can achieve more if you focus on one technology,” he noted.
In India, the BMW Group’s car sales jumped by 21 per cent year-on-year (Y-o-Y) to 7,098 units in the first half of 2024, fuelled by high demand for its sports activity vehicles, luxury class and electric cars.
Parain said, “We have seen competitors struggling with their transformation to BEVs. For example, if you see the BEV sales of Porsche, they have gone down by 50 per cent in the H1 of 2024. You can see even Mercedes-Benz and Audi struggling with their BEV offensive. So, we believe we have better products. That is the main explanation for our growth.”
“We have also put in a lot of overall efforts, including our dealer partners and their training, looking at the infrastructure investment and destination charging, our well-equipped service facilities, etc.,” he said, adding that the transformation of the market from ICE cars to BEVs is a marathon and not a sprint.
“However, the adoption of BEVs is very much linked to the state’s policies. And we see that in some markets, subsidies have been reduced due to budget constraints,” Parain added.
He said in Australia, where subsidies for BEVs have actually been increased, BEV penetration has risen from 3 per cent last year to about 25 per cent this year. “However, it is true that at a worldwide level, due to budget constraints, adoption has been slower than expected,” he said.
The BMW Group’s production strategy has been designed in such a way that it is flexible enough to go from producing ICE cars to BEVs. “This flexibility will be the key. For sure, adoption will grow but the pace of adoption will remain a question mark for the future,” Parain noted.
He asserted that the BMW Group will expand its investments in BEVs. The Group will soon introduce a new generation of BEVs for its customers, he added.
First Published: Jul 24 2024 | 8:37 PM IST
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