Kia has raised a red flag on how the reducing of government EV incentives, would affect the country as India faces the future of electric mobility. The automaker was appalled that cutting support for electric vehicles (EVs) would lead to a crisis for car buyers and stun the country’s push toward greener transportation.
Key Highlights:
- Government is planning to Increase the GST on EVs.
- Hyundai is doubling its investment in EVs and launch a series of new models in coming years.
- Tata and Mahindra are also on same page with Kia, in the reduction of incentives by givernment.
Kia’s Stand on EV Incentives
This was Kia India’s Managing Director Gwanggu Lee, who spoke at a recent event in New Delhi and expressed concerns over the deceleration of the EV adoption momentum in the country.
“Electrification is a trend, well-structured, and it is the right way… but now it has slowed down,” Lee said, “noting that the pandemic-related surge in demand for electric vehicles had flattened.”
India’s current EV market is growing, but the country still faces significant issues. These relate to inadequate charging infrastructure, consumer concerns over long-term battery life and prohibitively expensive repairs. Government incentives, which are geared toward tax relief rather than immediate subsidies, have helped drive the purchase of electric vehicles. Lee cited other nations worldwide that applied cash rebates to convince consumers to buy electric cars.
GST Hikes on Luxury EVs
Kia’s note comes when the GST (Goods and Service Tax) Council is warming up to a hike in tax on luxury electric vehicles. If the government increases tax rates on high-end EVs, prices will go up, making electric cars unaffordable for many buyers. The issue is compassionate for Kia and other automobile companies. Concerns about resale value and charging stations hound consumers into not buying EVs. A sharp uptick in the cost of EVs might discourage the same consumers who hope to bring into its electric dream.
An Industry Divided by EV Incentives
Although India is on its way to taking EVs seriously, everyone within the industry does not seem to be of the same opinion regarding the maturity of the landscape. While Kia and others are pushing for stiffer incentives to boost adoption, some other companies have taken a different route. Hyundai, for example, has played tough by doubling down investments in electric vehicles and planning a series of new models to hit the roads in the following years.
Tata Motors and Mahindra, India’s biggest carmakers, are equally wary of the prospect. Arguing that lifting incentives at this stage would undo all the good done so far. Even imperil India’s vision for hundreds of millions of mass adopters of EVs. Both the companies are pushing hard for a single ‘EV-friendly’ policy. Companies such as Maruti Suzuki and Toyota are asking for a more balanced approach, with hybrids running alongside EVs.
ELCTRIK Speaks
Kia’s stark warning underscores how this balance between government policy and market growth might easily be upended. It will find itself in need of policymakers’ support as the country builds towards a greener future. The automotive industry has made it clear, cutting back on EV incentives may reverse all progress made. Is it going to make the most of the opportunity and ensure the continuation or create a roadblock in policy that slows down this critical transition?
