Audi says a reduced tax on imported EVs will help test India market

Audi India, a subsidiary of Volkswagen (OTC:) (ETR:), expressed on Friday that a reduction in import taxes on electric vehicles (EVs) would facilitate the German automaker in conducting more effective experiments with various models and pricing strategies within the world’s third-largest automotive market.

“If we get a window of three to five years where the government is able to reduce the duties, it will let us experiment what models make sense for India and help in terms of pricing points,” said Audi head, Balbir Dhillon at a showroom launch in Bengaluru.

The Indian government has previously commented that the country is working on a new EV policy that would slash import taxes for automakers that commit to some local manufacturing.

Earlier this week, India’s Commerce Minister, Piyush Goyal, announced that the government plans to work with industry experts to formulate a new policy aimed at attracting increased investments in the EV sector.

Audi is striving to close the gap with competitors, BMW (ETR:) and Mercedes (OTC:), as it undergoes the transition to EVs. Presently, Audi’s Indian division exclusively manufactures internal combustion engines locally.

The efforts align with India’s broader push for environmentally friendly transportation, with the government aiming to boost EV sales from the current modest 2% to a substantial 30% by the year 2030. Among these EV sales, luxury electric vehicles represent only a small fraction.

Following the introduction of four new models last month, Audi India’s product lineup now includes six out of 16 models that are electric cars. These electric models are entirely imported and available for purchase in India, with prices ranging from $136,000 to $234,000.