‘Marathon not a sprint’: Audi India head on EV adoption

The slowdown in electric vehicle (EV) sales is temporary and the industry will grow over time, Audi India head Balbir Singh Dhillon said, pointing to the need for extensive charging networks and supportive government policies.

BloombergNEF predicts global electric car sales to grow at an average of 21% per year in the next four years, compared to 61% between 2020 and 2023. While some global car makers like Toyota Motor Corp. are taking the slow track on electrification, Audi plans to go fully electric by 2033.

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“A lot of incentives have been given to the industry in the past…whenever the incentives are taken back, you will always see this slowdown that happens. But I think all of this is temporary,” Dhillon said at the Hindustan Times Leadership Summit 2024 on Friday. “We are running a marathon. It is not a sprint,” he said.

In countries with high EV penetration like Norway and Iceland, strong charging networks and consistent government policies have helped, Dhillon said. “There were very strong incentives, not just to the car buyers, but to the manufacturers, as well as to the charging infrastructure companies. So, most of the original equipment makers tied up with charging infrastructure companies and set up their charging network,” he said.

Sparse charging network

A sparse charging network and weak resale value are two key concerns for potential EV buyers in India, Dhillon said. Audi India has set up 140 charging points at its dealerships, apart from creating MyAudi, an app to guide drivers to the nearest active charging points. However, setting up a robust charging infrastructure is a challenge. “First and foremost is geography,” Dhillon said. “There will always be a limitation for us that we, at the end of the day, are not a charging infrastructure company,” he added.

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A policy on charging infrastructure and a single platform or app for charging would benefit the industry, Dhillon added. “The most important topic would still be if there is a way the government can help improve the high-speed charging infrastructure across the country,” he said.

The PM E-Drive scheme announced on 10 September has taken a step in this direction. The scheme allocated ₹2,000 crore to support the installation of 22,100 fast chargers for electric four-wheelers, in select cities with high levels of EV penetration.

GST cut helpful

Dhillon said the Centre's decision to reduce goods and services tax (GST) on electric cars to 5% from 28% has helped a lot. “What we expect from the government is a stable policy where we can plan for three to five to 10 years ahead of us,” he said.

In September, the Delhi government withdrew its road tax waiver for EVs, raising their prices by 10%. Last year, Telangana replaced a road tax exemption for electric cars with a levy of 11-15%.

“Suddenly, when these kinds of incentives are withdrawn, you see customers shying away from buying the vehicles,” Dhillon said.

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Audi India sells six electric models in India, all of which are imported. The company needs a certain minimum threshold of electric car sales in India before it can start assembling and manufacturing them locally, Dhillon added. The company believes that 40-50% of all luxury cars sold in India will be EVs by 2030.

 “You have to keep in mind that even if we sell one car in the country, we have to service that car for 10-15 years. So, a minimum threshold is required for us to take that decision,” Dhillon said.