Volvo India: EVs Steady, Mild-Hybrids Gain Traction Post-GST
Overview
Volvo Car India's Managing Director Jyoti Malhotra stated the company remains committed to an all-electric future, with EVs accounting for one in four sales. However, the implementation of GST 2.0 has significantly boosted the appeal of its mild-hybrid SUVs, driving substantial sales growth for models like the XC90 and XC60, while plans for an aggressive EV rollout are set for 2026.
GST 2.0 Boosts SUV Appeal
Swedish luxury carmaker Volvo Car India is firmly committed to an all-electric future, with electric vehicles (EVs) consistently representing one out of every four cars sold domestically. Despite this focus, Managing Director Jyoti Malhotra indicated that the recent implementation of GST 2.0 has made its mild-hybrid SUVs a significantly more compelling proposition for Indian consumers.
Steady EV Sales Mask ICE Demand
Malhotra elaborated that GST 2.0 has effectively streamlined the luxury vehicle segment through tax rationalization. While the government's continued 5% GST on EVs supports the long-term electrification strategy, the reduction in overall taxes for luxury internal combustion engine (ICE) vehicles has amplified the attractiveness of Volvo's mild-hybrid SUVs. This has led to considerable double-digit growth in monthly sales for flagship models such as the XC90 and XC60 in the post-GST period.
Aggressive EV Rollout Planned for 2026
Volvo's EV sales figures have remained consistent, with approximately 25% of its sales originating from electric models. This steady performance is attributed to factors including the successful market entry of its EX30 model and a temporary recalibration of availability for CMA platform vehicles during a transition to new global supply cycles. The company views these figures as a stable baseline as it gears up for a more aggressive EV rollout anticipated to commence in 2026.
Price Hikes Loom Amidst Forex Concerns
Looking ahead, Malhotra anticipates 2026 to be a dynamic year for the luxury automotive segment. He cautioned that adverse foreign exchange fluctuations and other business-related factors could necessitate price increases for some Volvo car models. The revised GST 2.0 regime, effective since September last year, introduced varied tax rates, with smaller engine vehicles benefiting from lower rates, while larger, longer vehicles face a higher 40% GST slab.
