Hybrids, particularly plug-in models, remain largely concentrated in the premium and luxury segments in India.
Swedish luxury carmaker Volvo Cars is exploring the possibility of launching plug-in hybrid vehicles in India but considers the high tax burden on these models a major hurdle, according to a senior company official, PTI reported.
Speaking to the agency on the sidelines of the launch of its new electric luxury SUV, the EX90, Volvo Car India Managing Director Jyoti Malhotra said the company intends to maintain a balanced portfolio of electric vehicles and mild hybrids while assessing the potential for plug-in hybrid electric vehicles (PHEVs).
"The challenge is that [for introducing plug-in hybrids] Indian taxation is not conducive," he was quoted as saying.
Also read: Volvo EX90 Electric Three-Row SUV Launched in India at ₹1.26 Crore
Several established carmakers in India are exploring multiple powertrain options, including different hybrid technologies and pure electric vehicles. However, hybrids, particularly plug-in models, remain largely concentrated in the premium and luxury segments because of their higher costs.
Battery electric vehicles (BEVs) attract 5 per cent GST in India, while plug-in hybrids above the small-car category are taxed at 40 per cent. The difference in taxation between the two categories stands at 35 percentage points.
Volvo Plans 3 EV Launches Over Three Years
Alongside evaluating plug-in hybrids, Volvo plans to introduce three new all-electric models in India over the next three years.
The company currently sells two fully electric models in the country, the EX30 and EC40, alongside the XC60 and XC90 mild hybrids.
On Monday, Volvo launched the EX90 at an ex-showroom price of ₹1.26 crore. The six-seater luxury SUV is built on the company's SPA2 platform, with deliveries scheduled to begin in January 2027. Its next electric vehicle launch is expected to be the ES90 sedan.
Malhotra said electric vehicles currently account for one-fourth of Volvo's sales in India, although supply-chain constraints are affecting sales in the near term.
"Our strategy is very simple. We will bring one electric car every year," he said. Asked about the expected powertrain mix over the next three years, he declined to comment.
Supply Chain Disruptions
Malhotra said recent supply-chain disruptions have raised costs and extended lead times for imported kits used to assemble vehicles in India, making delivery schedules less predictable.
He declined to quantify the impact on sales volumes but said the disruptions had affected sales considerably.
Price Hike Likely Amid Rising Costs
Despite the increase in costs, Volvo has not raised prices since the first quarter of this year. However, Malhotra indicated that the company could pass on some of the additional costs to customers during the festive season.
"We are getting very close to where we will be forced to pass this (higher cost) on to customers," he said.
On sales volumes and market share, Malhotra said Volvo's near-term priority in India is to strengthen brand awareness and improve the customer experience rather than focus on increasing volumes or market share.
