Amid auto slowdown, BMW India sees a surge in EV sales

New Delhi: German carmaker BMW recorded a threefold on-year growth in electric vehicle sales in India in the first three months of this year, contradicting the auto industry’s widespread scepticism about the speed of adoption of electric cars.

For BMW, the second-largest premium car seller in India, its total EV sales of 646 cars from January to March accounted for 17% of its overall sales of 3,914 cars in the country. Its overall sales improved 7% from the same year-ago period.

“Many players had set some unrealistic expectations regarding transition to EVs in a short period, which is why there is some disappointment about the pace of adoption,” Vikram Pawah, president and chief executive, BMW Group India, said in an interview.

In a meeting with analysts in March, Tata Motors Ltd, India’s third-largest carmaker, said it may consider extending the life of traditional internal combustion engine platforms for manufacturing its cars amid a slowdown in key western EV markets such as the US and Europe.

British luxury carmaker Aston Martin has also delayed its plans to launch its pure electric vehicle to 2030.

Maruti Suzuki India Ltd’s Partho Banerjee, senior executive officer–marketing and sales, pointed out recently that in India electric vehicles remained a secondary car in many households—a market where sales are unlikely to see fast growth.

“EVs sold today are not primary cars, but rather secondary. Till the time we don’t solve customer concerns on range, charging infrastructure, and post-sales, buyers will not have confidence,” Banerjee said during a media briefing on 1 April.

Electric car sales in India grew 20% from a year earlier to nearly 100,000 in 2024, but the penetration of electric cars in the country was just at 2.5%.

Global slowdown and the Trump uncertainty

BMW India’s Pawah remains bullish about the prospects for electric vehicles in the premium segment, where BMW competes against Mercedes-Benz, Audi and Volvo.

The carmaker launched a new EV model, BMW iX1 Long Wheelbase, at the global auto expo held in New Delhi in January, receiving more than 1,500 bookings for it.

“We are witnessing equivalent interest for electric vehicles in the emerging urban centers and the top 10 cities. The range being offered is attractive to the customers in smaller cities,” Pawah said.

Despite a broader slowdown in the car industry, the premium market is faring better. In 2024, BMW sold 15,721 units in India, a 11% growth from the year before. Of these, 1,249 were electric vehicles.

The global auto industry, however, faces an added layer of uncertainty due to US President Donald Trump’s additional 25% tariff on automobile and auto parts imported into the country.

Analysts at Kotak Institutional Equities said in a note dated 1 April that global auto players were cutting back on investing in research on new technologies and focusing on core businesses for now amid this policy uncertainty.

“Most OEMs (original equipment manufacturers) indicate the peak of investments is now behind, even as programs around new platform launches continue, albeit with an added element of caution,” analysts Kawaljeet Saluja, Vamshi Krishna and Satishkumar S. wrote in the Kotak note.

“With expectations of reduced subsidy for EV in the US and extension of meeting carbon dioxide emission regulations in the EU, most OEMs are refocused on their ICE product pipeline but still expect [battery electric vehicle] penetration to increase,” analyst Jay Kale of Elara Capital wrote in a note dated 18 March.