German luxury carmaker Audi is all set to enter into India's electric vehicle space with its latest launch—the e-tron. This is in tune with the Volkswagen Group's global strategy of phasing out its entire range of petrol and diesel variants with an aim to become an all-electric brand by 2033. The group’s subsidiaries Porsche, Audi, Bentley, and Lamborghini are all focussing on strengthening their electric offerings.
"Our long term goal is to also sell more electric cars and by 2025 we intend to reach 15% of our sales into EVs. Audi globally has also decided that it will become an electric car company in some years. We will only be launching electric from 2026 but will continue to sell IC engines till 2033. So, the direction is clear and we need to work towards it," says Balbir Singh Dhillon, head, Audi India to Fortune India.
The fourth-largest luxury auto brand in the country will offer the Audi e-tron in two body styles—Audi e-tron and Audi e-tron Sportback. Audi e-tron buyers will further have the choice of the Audi e-tron 50 and Audi e-tron 55. Dhillon says that the company launched three models to give a better choice to customers. The Audi e-tron 55 and the Audi e-tron Sportback 55 draw power from a 95kW battery and have a range of 359-484 km (WLTP combined). Both these cars boast of 300 kW of power and 664 Nm of torque. The Audi e-tron 50 draws power from a 71kW battery and has a range of 264-379 km (WLTP combined). The Audi e-tron 50 boasts of 230 kW of power and 540 Nm of torque.
Launched at a starting price of ₹99.99 lakh, it competes with the likes of Mercedes-Benz EQC and the Jaguar I-Pace. "Luxury segment as a whole has not been very big in India. We’re 1% of the overall car industry but we also expect as we grow forward this to grow further in terms of not just the total number but also a little larger as a percentage of automotive industry. There’s a lot of growth potential in mobility in India for many many years to come," Dhillon says.
Experts believe that Tesla’s entry into the Indian market close to the end of 2021 will give much-needed boost to the luxury segment overall. "We’re at a very nascent stage and we have to develop this market into e-mobility. And all the players coming together and creating infrastructure and opening up more avenues of selling cars will always help. The more players, the merrier it is," Dhillon adds.
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He acknowledges that while most South-East Asian countries have reached over 5%-6%, in India, the penetration of luxury cars is below 1%. "This is primarily due to very high taxes and duty structures. Whether we’re making the cars locally or getting them as FBUs, the taxation is very high. Then you have at first level import duties, GST between 48%-50%, and registration taxes that go as high as 10%-20%. This is a reason mainly why luxury remains a very low percentage of the overall auto industry," he points out.
Electrification, he argues, has an added benefit because the GST is 5%. All e-trons are being imported as FBUs (fully built units) and Dhillon says that all options for localisation are on the table "whenever it makes business sense to start producing locally."
All major luxury carmakers in the country are battling the same conundrum. But it's a long way for EVs, they feel. "It’s a very nascent stage of electrification in India. This can only be successful if all manufacturers come together and create an infrastructure, govt has to play their role to make electrification journey a success. Electrification is going to be a marathon. It’s not a sprint. We have to be patient," Dhillon says.