Need stable GST regime for EVs: Mercedes-Benz India

Santosh Iyer, the company’s managing director and chief executive officer, said the government should commit to a 5% GST (goods and services tax) rate on EVs till 2030, before it decides to gradually increase taxes on these vehicles, to encourage long-term planning and flexibility for carmakers.

“We need not only year-on-year consistency, but commitment to a policy framework that outlines how the GST regime will pan out for EVs,” Iyer said, adding that since 20% of taxes on vehicles are levied by states, even state governments should “commit to emissions-free mobility at least for the next five years”.

“It is only if both the Centre and state governments are committed that we can look into a long-term, continued adoption of EVs,” Iyer said.

The GST Council slashed the rate at which EVs are taxed to 5% from 12% in 2019, a move that has spurred their wider adoption in conjunction with other benefits rolled out by states. Some states exempt road and registration taxes for EVs, which in the case of luxury vehicles are a significant cost to the customer. Some state governments, however, have now rolled back such concessions for EVs.

The Stuttgart-based carmaker has four EV models in India currently, including EQS, EQE & EQB, which sell for anywhere between ₹75 lakh and ₹2.5 crore ex-showroom. At the Bharat Mobility Expo, the German carmaker showcased the EQG concept, a vision of the G-Class SUV in an electric avatar.

On the conventional, internal combustion vehicles front, Mercedes-Benz has launched three new products since January, a quarter of its pipeline slated for launch this year in India.

They include the new GLA SUV, which marks the most affordable end of its portfolio, to the GLS SUV, and the performance-focused AMG GLE 53 coupé in India.

However, despite its recent launches and a strong order book, shipping delays due to tensions in the Red Sea are “adding another layer of complexity” to the German carmaker’s operations, potentially causing incremental delays in deliveries of vehicles to customers and to the import of parts needed to assemble vehicles at its assembly facility in Chakan, Pune.

“The shipping challenges for us are only a delay factor, so we have a two to three-week delay in getting what is required,” Iyer said. “Coming to parts and components, we have switched to a hybrid mode of getting air and sea shipments to keep production running on schedule.”

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Published: 06 Feb 2024, 11:44 PM IST