Tesla's India entry still in the realm of speculation, says Volvo Car India MD Jyoti Malhotra

In a dramatic ode to its Scandinavian heritage, Volvo Car India took the wraps off the facelifted version of its flagship SUV, the XC90, at the Embassy of Sweden, in New Delhi. The XC90, although cosmetically spruced up, essentially remains the same car it was when its last generational update was launched 10 years ago. It’s yet another sign that Volvo remains focused on electric vehicles (EVs). Certainly in the Indian market.

“One out of every four vehicles we sold last year was electric,” says Volvo Car India MD Jyoti Malhotra. The XC90 is a petrol-powered SUV that qualifies as a mild-hybrid. It’s the sort of car that now finds a place in Volvo’s global electrification floor plan, after the brand backtracked on its claim to be fully electrified by 2030. While the previous plan qualified an “electric” as a Battery Electric Vehicle (BEV), Volvo abandoned its BEV-only strategy in September 2024, stating that the brand will also have hybrids, mild-hybrids and BEVs on offer.

"Last year we revised our ambition. Our ambition is that by 2030, we want to be 90-100 per cent electrified, which is a mix of EVs and hybrids, at a global level. From the India perspective as well, we are aligned towards that goal.

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“As far as direction is concerned, we’re still very clear that the direction is towards electrification. But what we’ve seen is that the adoption towards electric is not very linear and varies from country to country,” says Malhotra whose current EV line-up includes the popular XC40 Recharge and its coupe-SUV derivative — the C40 Recharge.

“Having said that, ICE engines are important. It’s not that we’re suddenly going to move away from it completely, overnight. The XC90 is a mild-hybrid, which is also E20 compatible. Because we want to make available the best when it comes to sustainability.” 

E20 compatibility comes in light of the government’s push for increased biofuel compatibility. When asked how much the E20 compatibility would affect the cost of the car, Malhotra said that the brand will not be passing on the cost of the E20 compatibility figments to the customer. The 2025 XC90, with its renewed interiors and refurbished exterior, now costs ₹1.03 crore (ex-showroom).

“And it isn’t about selling electric cars. It’s about how we look at achieving overall sustainability goals. Whether it is recycling the products. Or using reusable products in the cars. Energy used to produce cars. EVs are central and we will continue to boost them.”

On considering hybrids for the Indian market

Volvo, which has a fairly robust portfolio of plug-in hybrids sold globally, remains reticent like most luxury carmakers when it comes to bringing in plug-in hybrids. When asked about whether Volvo Car India is seeking any tax exemptions for plug-in hybrids, Malhotra said that the government’s unflinching stance on battery electrics is one he supports. “EVs make a lot of sense for India. We have the most polluted cities in the world. Then, if you look at it from an energy perspective, we are coming from a power-scarce country to a power- sufficient country and all our upcoming energy projects are focusing on renewable energy. The government is thinking long-term, in terms of decades. Everything needs to be looked at from the lens of the future.”

“And I think, as an industry in India. It is our chance to become a strong electric base for the world. And the more the government pushes towards EVs, the better it will be for the country or the economy,” said Malhotra, unequivocally in favour of EVs. It’s a sentiment other European car brands do not seem to share, as brands like Mercedes-Benz, BMW and Audi have all altered their plans to go all-electric and are making significant investment in once again bolstering their ICE portfolios.

“We have much larger geopolitical issues pertaining to EVs, because Europe and the US are going in one direction while China is serving as the third pole. I think the last few weeks have been very disruptive.”

Policy consistency

Instead of rebates on hybrids, Malhotra has stated that the need of the hour is a long-term policy roadmap. Especially at the state government level. “You can’t be doing a flip-flop where one day you say there’s a road tax waiver, and six months later we see something else. That’s not the way”.

However, he clarifies that consitency needn’t be with regards to subsidies. “I can tell you, for any technology to succeed, you cannot be dependent on subsidies and crutches. This is still a new technology and economies of scale have not kicked in yet,” says Malhotra. It isn’t far-fetched to assume that the Geely-owned Volvo benefited to a great extent from the decade-long subsidies that the Chinese government offered EV buyers, in order to build a strong domestic market for EVs.

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“What we should have is a sunset clause. If a certain policy is available, it should be available till 2030 or 2035. From an investment perspective, we want continuity. I can’t bring in a car tomorrow, this is a marathon. It requires planning, research and more.”

On Tesla’s impending arrival

“I think, I would still put Tesla’s entry into India in the realm of speculation,” says Malhotra. However, he does add that everyone stands to benefit from more EV manufacturers entering the fray. “The more the merrier. It will only lead more companies to introduce EVs and that ultimately helps everyone as it once again creates demand.” 

“Two years back, when we brought in the XC40 Recharge, we could have sold more cars,” said Malhotra, citing apprehension in assuming more consumer interest in the EV than they had calculated. “We’re still a niche. So more options encourage us to bring more cars. It’s why this year, when so many EVs were announced, we are now seeing people consider EVs again.”

When asked about whether Tesla’s Model 3 would compete with the likes of the XC40 Recharge in terms of price, or the EX30 EV, likely to fall under the ₹50 lakh mark, that Volvo India is considering bringing to the country soon, Malhotra said that Volvo has legacy, a premium factor and price point working in its favour so Tesla will not be looked at as competition. It is unclear at this point whether Teslas will benefit from the lowered import duty policy that the government introduced for EV manufacturers willing to invest $500 million in India.

At present, Volvo assembles everything from the C40 Recharge and the XC40 Recharge EV alongside the new XC90. The EX30 EV will also benefit from local assembly, and Volvo, according to Malhotra, is currently studying its feasibility for the Indian market. As for localised battery assembly, Malhotra stated, “Once we’ve achieved certain economies of scale, we will start considering battery assembly.”