Volvo Reveals Its Hybrid Car Plans For India After GST

Swedish automaker Volvo has revealed its plans for hybrid vehicles in India after the implementation of Goods and Service Tax (GST).

Volvo has stated that it will continue to push hybrid and electric vehicles in the Indian market despite high tax rate on eco-friendly vehicles under the GST regime.

Previously Volvo had stated that from 2019, all its new models would have an electric motor apart from the internal combustion engine. The automaker also said that it would bring the new vehicles to India after they are launched in the global market.

The new GST taxation policy puts hybrid vehicles under the same category as conventional cars. So, hybrid cars attract a tax of 28 percent and 15 percent cess, taking the total tally to 43 percent. The GST tax rate is higher than the previous tax rate of 30.3 percent.

Volvo has already announced that it would launch five electric cars between 2019 and 2021. Three models will be from Volvo and two will be high-performance electric cars from Polestar.

Currently, Volvo sells its plug-in hybrid SUV, the XC90 Excellence in the country. Volvo is hoping that the Indian government will reconsider the tax rates on eco-friendly vehicles as it aims to go full electric by 2030.

Volvo Auto India Managing Director, Tom von Bonsdorff said, "Yes, I am bit disappointed with the high GST rate on hybrid vehicles as it is not in line with the government's push for environment-friendly vehicles."

Bonsdorff was speaking at the launch event of the Volvo V90 Cross Country. The luxury crossover station wagon is priced at Rs 60 lakh ex-showroom (India). The vehicle is based on the S90 sedan.

DriveSpark Thinks!

The GST tax rate on hybrid vehicles in India has received a lot of criticism. But the automakers have stated that they will continue to sell such vehicles in the country. But it would be better if government reevaluates the tax rate on hybrid vehicles.