Kia India Managing Director and CEO Gwanggu Lee on Thursday said that the increase in taxes on electric vehicles will make the electrification journey of the Indian automobile industry difficult. The company has launched a new SUV, the Syros, and expects sales to grow by about 17% to 300,000 units next year, compared with an expected sales volume of 2.55 units this year.
Li said a big burden for electric vehicles is still their high price. Asked about the impact of a possible increase in taxes on electric vehicles, he said: “So without any tax incentives from the government, it will be very difficult.” New electric vehicles are currently subject to a 5% goods and services tax. There is speculation that the Goods and Services Tax (GST) rate for used electric vehicles, currently 12%, may be reclassified to a higher rate of 18%.
Kia India currently sells two electric models – EV6 with a starting price of Rs 60.96 lakh and EV9 with a starting price of Rs 13 crore. Lee cited the example of Canada, where sales of electric vehicles dropped sharply when incentives for electric vehicles were removed. However, he said the situation in India is different as most of the current high-end EV customers are multi-car owners who can afford high-priced cars.
“So electric vehicles (customers in India) are very different from other countries. If they want, they can choose electric vehicles without such incentives,” Lee noted. When asked about the sales outlook in 2025, he said Kia India’s annual sales are expected to be around 300,000 units, higher than this year’s forecast of 255,000 units.
He also said that India remains one of the most promising markets for Kia globally and that the country remains the fastest-growing economy in the world, which brings a lot of hope to the automaker. “Economic growth of 6% is not bad… It’s good… India is still rising because the economy is growing… It means new customers and new families have the ability to buy new products and cars,” Li pointed out.
The company’s new product Syros, which will start deliveries from February, is expected to further accelerate the growth of the SUV segment, in which Kia India is a major player.
Kia India’s senior vice president said that in the compact and mid-size SUV segments, as well as the MPV (multi-purpose vehicle) integrated segment of about 1.8 million units, the company hopes to increase its market share from 15% to 20% by 2025. %.