Swedish luxury car maker Volvo Cars has said that around 80 per cent of its sales could be electric cars by 2025 in India, while globally it will be around 50 per cent. The Company is excited about EV as it will be 43 per cent cheaper than alternate fuels due to policy initiatives taken by the Government.
After inaugurating a new dealership and unveiling S60 at Chennai today, Charles Frump, managing director, Volvo Cars India said that the luxury segment will lead the way for electric vehicle transformation. However he cautioned, the Government should not change the policies.
“It is important to keep the policy the way it is now, because the policy is good and I’ve built my entire EV strategy based on the very good policy that India has in line with their vision to be fully electrified,” said Frump, adding that EV policy is better than Norway’s.
Volvo’s emphasis on EV is part of the company's transformation from diesel to petrol and to EV. Last January, Volvo launched XC-40 SUV in petrol version and now unveiled S60, which is priced at around Rs 45.9 lakh. The other offerings including S90, which is sedan, and XC-90 are diesel and slowly they will also become petrol.
“We are investing heavily on petrol and EV,” said Frump, who will move to global assignment after a 3.5 years stint in India. Jyoti Malhotra will take over from Frump. Malhotra has been the company's Director - Sales & Marketing and he will be the first Indian to head the Swedish luxury brand in India.
Volvo feels the business case for EV cars in India is better than that for internal combustion engine (ICE) luxury cars. Given the high taxes and import tariffs which have constrained volume growth in the luxury ICE segment, it is betting big on EVs in India.
Overall tax burden will be 43 per cent less compared to ICE and some of the states have also relaxed road tax for EVs, said Frump. It may be noted, Volvo’s XC 40 petrol version is sold at around Rs 39.9 lakh in India, while S60 priced at Rs 45.9 lakh, XC60 SUV priced at Rs 59.9 lakh, XC90 SUV priced at Rs 87.9 lakh and hybrid version of XC 90 is priced at Rs 1.3 crore.
Frump said, not that customers in India don’t want luxury cars the problem is affordability due to the current high tax structure. Of the overall car sales in India, luxury segment share is only one per cent as compared to 10 per cent in China, 40 per cent in few European countries.
“Ï am excited and bullish is about EV in India,” said Frump adding that globally, “Volvo Car expects half of its volumes to be fully electric by 2025. In India, “our plan is the same goal or maybe even more than 80 per cent. “Electric cars have taken off in Norway and that has been huge for us as at Volvo. Policies in India are better than Norway,” said Frump.
He said, one of the major challenges in the EV segment is anxiety about the range. In the luxury segment it will not be a challenge since 90 per cent of the travel in this segment is only upto 50 kms.
Customers in this segments own multiple cars. So, if there’s some worry about range anxiety, and they are going to go a really long way, they will take their other car. The majority of luxury customers can afford to have their own charging point at their house and at work.
“So, for luxury customers, some of the barriers are lower than for non-luxury customers,” he said.
Meanwhile, Volvo in India is planning to introduce ‘One price nationwide’.
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