Increase in tax on electric vehicles will make it difficult for the electrification journey of the Indian automotive industry, Kia India Managing Director and CEO Gwanggu Lee said on Thursday. The company, which unveiled its new company SUV Syros, is looking at around 17 per cent sales growth next year at 3 lakh units as compared to 2.55 units expected this year.
A big burden for EVs is still the high price, Lee said. “So without any tax incentive from the government it is very difficult,” he said when asked about the impact on possible increase in tax on EVs. New EVs at present attract 5 per cent GST. There has been speculation that the GST rate on used EVs, currently taxed at 12 per cent, may be reclassified into the higher 18 per cent tax slab.
Kia India currently sells two EV models — EV6 with price starting at Rs 60.96 lakh and EV9 tagged at Rs 1.3 crore. Lee cited the example of Canada where sales of EVs crashed when the incentives on EVs were removed. He, however, said the situation in India is different as most of the current premium EV customers are multiple car owners and they can afford high priced vehicles.
“So EV (customers in India) are very different from other countries. They can choose the EV car without that kind of incentive, if they like,” Lee noted. When asked about sales outlook for 2025, he said Kia India is looking at an annual sales of around 3 lakh units, up from 2.55 lakh units expected this year.
He also said India remains one of the most promising markets for Kia globally and the country is still the fastest growing economy in the world promising a lot for carmakers. “The growth of the economy of 6 per cent is not bad… This is good… India is still going up, because the economy is growing… It means new customers and new households are able to afford to buy new cars,” Lee noted.
The company’s new offering Syros, which will start deliveries from February, is expected to further accelerate growth in the SUV segment, where Kia India is a significant player.
In the compact and mid-SUV segment, along with MPVs (multipurpose vehicles) combined segment which is around 18 lakh units, the company is looking to increase its market share to 20 per cent in 2025 from 15 per cent, Kia India Senior Vice President, Sales and Marketing, Hardeep Singh Brar said.
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