Favourable tax structure required to launch EVs in India: Mercedes

New Delhi: German luxury carmaker Mercedes-Benz can drive in a fully electric vehicle to India as early as next year depending on a favourable taxation structure for such vehicles in the country, a top company official said.

Globally, the company is developing a range of electric vehicles and expects that by 2022, around 20-25 per cent of its total sales worldwide would come from electric vehicles (EVs).

"We believe in electric vehicles. Globally, we are putting in resources to develop EVs. By 2022-24, we are going to have 15-20 completely new such models. We strongly believe that 20-25 per cent of our volume by 2022 might be EVs. We are gearing up in that direction globally. In India, it all depends again on taxation," Mercedes-Benz India MD and CEO Roland Folger told PTI.

He added that currently there is no inherent interest to switch to EV segment among buyers in the country and that to make the segment attractive there is a need to have such vehicles on the ground.

"By 2019, we can bring in our first electric vehicle (In India) and with attractive range...But there are lots of things in India which we need to clarify... ," Folger said.

When asked about specific things that the company would look at before bringing in the EV, Folger said: "We would need a solution which lets us bring in the CBU vehicles..You need to start small and then grow organically. You cannot do that if the only benefits available currently would go into locally manufactured vehicles," he added.

He said that the fully imported completely built units (CBU) of EVs should be treated at par in terms of taxation with locally manufactured vehicles supporting green technology.

"When we reach a certain volume, say 600 units on CBU basis, then we can turn it into local manufacturing as well," Folger added.

He said that currently launching an EV does not make sense as even a mid-sized EV would be as expensive as a S-Class sedan. Under the current GST regime, EVs attract a tax of 12 per cent. Imported cars on the other hand attract custom duty of 60 per cent and 100 per cent depending upon the price and size of the engine.

In the Budget for 2018-19, the government has also increased customs duty on CKD (completely knocked down) imports of motor vehicles, motor cars, motor cycles from 10 per cent to 15 per cent. Further, duty on CBU (completely built units) imports of motor vehicles (trucks and buses) was hiked from 20 per cent to 25 per cent.

The Indian government had last year said it plans to have 100 per cent electric vehicles in public transport and 40 per cent in personal mobility by 2030.

However, earlier this year it changed its stance and decided against formulating an electric vehicle (EV) policy saying technology should not be trapped by rules and regulations.