Volvo Car India is currently not planning to leverage India's electric vehicle (EV) promotion scheme due to the present scale of the industry. However, the company will consider introducing plug-in hybrid vehicles in the country if the tax structure becomes more favorable.

Jyoti Malhotra, Managing Director of Volvo Car India, stated that the company believes CKD (completely knocked down) operations offer the best solution for their current scale, which they will continue to utilize. As the industry grows and more benefits become apparent, Volvo will evaluate other options. Malhotra was responding to a question about whether Volvo Car India intended to utilize the benefits offered by the government's Scheme to Promote Manufacturing of Electric Passenger Cars in India. This scheme allows companies to import up to 8,000 electric four-wheeler units annually at a reduced import duty of 15%, compared to the current 70-100%, if they commit to investing ₹4,150 crore in establishing local manufacturing facilities.

Malhotra emphasized that various factors are considered before making such a decision, including scale. He noted the numerous benefits available in India for manufacturing or importing cars.

When asked about increased competition with companies like Tesla entering the Indian market, Malhotra welcomed new entrants, stating that India needs more players and that they are all colleagues. He believes that Indian customers need choice.

Volvo Car India aims to introduce one electric car every year and is confident in the long-term prospects of the Indian market despite global uncertainties. The company launched the new XC90, a mild-hybrid SUV, in the first quarter of the year, and plans to introduce the EX30, a compact electric SUV, later this year.

While the penetration of EVs in the Indian passenger car market is currently around 2%, it is projected to increase to 5% by FY27 and 9% by FY30, driven by increased public awareness, government incentives, new EV models, and improved charging infrastructure.

Regarding plug-in hybrid electric vehicles (PHEVs), Volvo Car India currently has no plans to introduce them due to the unfavorable tax structure. PHEVs are subject to a 28% Goods and Services Tax (GST), and the effective tax rate on hybrid cars is around 48% due to additional taxes and cesses, making them less feasible for the Indian market. However, Volvo is open to reevaluating this decision based on changes in the tax structure.

Malhotra also highlighted the importance of state governments offering low or no road tax on EVs to expand their reach. While many regions offer road tax exemptions for EVs, the specifics vary by region and local government policies. Some states, like Delhi, Haryana, and West Bengal, offer complete exemptions, while others, such as Telangana, Kerala, and Andhra Pradesh, impose some level of road tax.

Volvo Cars has a global goal that every vehicle it launches from 2019 will have an electric motor, and it aims to have one million electrified cars on roads by 2025.