Volvo Cars sees steady demand in India for its hybrids in the near future and any step to go straight from combustion engines to electric is “too far,” said Charles Frump, managing director of Volvo Auto India.
India will need to define its roadmap on electric cars and maintain a consistent duty structure to encourage investment, said Mr. Frump, who took charge of the Indian operations of the Swedish luxury carmaker in October last year.
“From 2019 forward, we will have every car electrified to some extent, mild-hybrid, full hybrid, plug-in hybrid or full battery electric. The cars we are currently building will live out their life cycles as they are,” he said in a telephone interview.
“We at Volvo feel that a step from pure internal combustion engines to electrified engines is too far a step. There needs to be a role for hybrids. To go from combustion engines to hybrids and then to electric is a logical step for us. We are happy to go directly to hybrids from diesel engines and capable of doing it with petrol also.”
Environment impact
“It could have an immediate impact on the market and environment if there was some kind of beneficial treatment for hybrids,” Mr. Frump said.
India’s Budget has proposed to increase customs duty on completely knocked down imports of vehicles, cars and motorcycles from 10% to 15%. Duty on completely built units of trucks and buses will also be raised to 25% from 20%. Customs duty will also double from 7.5% to 15% on specified parts of vehicles and cars.
The Centre plans to make all vehicles in India electric by 2030. Volvo Cars — a unit of China’s Geely — is aligned with the government’s strategy, Mr. Frump said but added “what we are now lacking is the roadmap of exactly how to get there. The primary reason for that is that at the moment is the infrastructure. The number one concern for users of battery electric vehicles is the anxiety due to the lack of charging stations. The decision of carmakers to set up plants to make batteries depends on whether the government keeps its existing tax structure.”
Tax structure clarity
“It will be great for us to understand what the structure would be when you talk about a CKD and SKD plant and what that means for the electrified vehicles. The specifics of that would be extremely helpful. We need to know the tax structure and what they mean when it comes to hybrids.”
There was a big move towards hybridisation, Mr. Frump said adding there was significant depth and breadth of hybrid technology that India was not picking up. While Volvo would eventually move towards fully electric cars, hybrids were in demand now, he said.
India revoked financial benefits granted to hybrids under the Faster Adoption and Manufacturing of Hybrids and Electric Vehicles scheme. Post GST, hybrid vehicles are taxed at 43% from 28% earlier.
“What we see now is... there is more demand for hybrids. [The move toward electric cars] is a purposive way to push customers and carmakers in a clear direction and we are ahead in that curve,” he said.
