Three years from now, eight out of 10 cars that Volvo Car India will sell are likely to be electric. That’s the plan the Swedish luxury carmaker is working on as it seeks to ride the mega electric mobility trend in the luxury car segment.
In this segment, adoption of battery electric vehicles (BEVs) is expected to be a lot faster than the mass car segment.
This is in line with the parent company’s goal of becoming a pure electric firm by the turn of the decade.
Volvo currently sells the XC40 Recharge in India — launched in July this year — and plans to bring one EV offering every year over the next few years, the company’s top official said. It would launch the C40 Recharge in 2023.
“We will be launching one EV (electric vehicle) offering every year and have an ambition to have 80 percent of the total sales coming from electric cars by 2025,” Jyoti Malhotra, managing director (MD), Volvo Auto India, told Business Standard.
The smallest among luxury car makers in volume terms in India, on an average, Volvo sells 1,700 to 1,800 cars per annum. Its annual sales figure is likely to touch 5,000 units by 2025.
On Wednesday, it launched model year 2023 range of petrol mild-hybrid cars of its compact luxury SUV, the XC40 (for Rs 45.9 lakh, ex-showroom), luxury sedan S90 (Rs 66.9 lakh), mid-sized luxury SUV XC60 and the flagship luxury SUV XC90 (Rs 94.9 lakh, ex-showroom).
With these introductions, the company completes its transition to petrol mild-hybrids. It is moving closer to the Volvo Cars sustainable mobility ambition, the company said.
All of Volvo’s models are imported as completely knocked down (CKD) kits and assembled at its factory near Bengaluru. Unlike the fully-imported models — that attract 100 percent duty — CKD kits attract only 30 percent.
This has enabled the company to price the XC40 Recharge a lot more competitively at Rs 55.5 lakh compared to e-luxury cars from Mercedes-Benz, BMW, Audi and Jaguar Land Rover. All of these companies currently import electric models that are priced at Rs 1 crore or above.
With a goods and services tax (GST) rate of 5 percent, electric cars fall under the lowest tax bracket.
In addition, there are also no registration charges and road tax levied on them. This has prompted luxury carmakers to bring the latest e-models from their global portfolio.
Even the other upcoming EV models, which Volvo plans to introduce in India, will be locally assembled. The company has been “passing on all the benefits of local assembly to buyers,” said Malhotra.
The shift to electric will be very fast in the luxury segment as car owners are willing to go for it, he pointed out.
“While everyone has been testing waters with an imported model, we have gone and established CKD operations. This is because we want to offer them at a competitive price,” he said.
On Tuesday, Mercedes said it began bookings for the EQS 580 4MATIC, its flagship electric sedan, which would be locally assembled. It will go on sale from September 30.
As a run up to the company’s target of being carbon neutral by 2030 globally, Volvo will no longer be launching a pure internal combustion engine (ICE) model in India.
All its upcoming models will either be petrol hybrid or pure electric.