In the weeks before India's Union Budget, BMW Group India has asked the government to leave the 5% goods and services tax on electric vehicles exactly where it stands. The request comes from a country where electric cars still make up only a sliver of the passenger market, and where the industry sees a tax increase as a threat before adoption has reached its tipping point. Behind the plea lies a familiar tension in a developing economy: how to nurture a new mode of mobility while the batteries that power it remain expensive. Whether the government holds its hand or reaches for the tax lever wi
BMW Asks Government to Keep 5% GST on EVs as Budget Nears, Warns Hike Would Hurt Industry
Until battery costs come down, a GST hike would be very detrimental
Mark
Why is BMW making this request now?
Mimi
The Budget is close, and Brar said talk of raising GST on EVs keeps coming back. He wants the 5% rate locked in before any decision.
Mark
What's his main argument?
Mimi
That the market is too young. He says EVs are about 4% of India's passenger vehicles, against over 10% in developed countries and 40% in China.
Luke
Those market-share figures are Brar's, given in an interview. The report doesn't say where they come from or what year they cover.
Mark
And BMW's own sales?
Mimi
Electric sales rose over 200% in 2025, and total BMW and MINI sales grew 14.4% to 18,001 units.
Luke
Worth noting that 200% growth is a percentage, and we aren't given the actual number of EVs sold. It's a company-reported figure too.
Mark
Does he say what the penetration is inside BMW?
Mimi
About 21%, rising to 23% in the fourth quarter on better supplies. Three new electric models should take it to around 25%.
Luke
That 25% is a company projection, not a result. And nobody from the government has said a hike is planned. All we have is Brar saying the talk keeps returning.
Mark
So what's confirmed?
Luke
That BMW has asked for the rate to stay at 5%. Whether the Budget does so is unknown.
Le Pouls
- BMW India's chief has made a single, pointed plea: keep the 5% GST on EVs untouched in the coming Budget.
- Talk of raising the tax keeps resurfacing, unsettling an industry that is still fragile and growing.
- Electric vehicles hold only about 4% of India's passenger car market, far behind China's roughly 40%, and the gap feels stubborn.
- BMW's electric sales surged over 200% in 2025 and its EV share is climbing, with three new electric models on the way.
- The Budget decision now sits as the pivot point, and its outcome will shape pricing and adoption in the months ahead.
In the weeks before India's Union Budget, BMW Group India has asked the government to leave the 5% goods and services tax on electric vehicles exactly where it stands. The request comes from a country where electric cars still make up only a sliver of the passenger market, and where the industry sees a tax increase as a threat before adoption has reached its tipping point. Behind the plea lies a familiar tension in a developing economy: how to nurture a new mode of mobility while the batteries that power it remain expensive. Whether the government holds its hand or reaches for the tax lever will help decide how quickly India's roads begin to hum with electric engines.
On Thursday, BMW Group India made a single request of the government ahead of the Union Budget: leave the 5% GST on electric vehicles where it is. Hardeep Singh Brar, the company's president and chief executive officer, told PTI that any further hike would be detrimental to the industry. He said the government had managed the economy well, keeping growth above 7 per cent, and that he had no other expectations. What troubled him was that talk of raising the tax on these vehicles keeps coming back.
His case rests on how small the market still is. EVs make up just 4% of India's passenger vehicles, compared with more than 10% in developed countries and about 40% in China. Until adoption reaches a tipping point, he argued, a tax increase would do real damage. He also tied the timing to battery costs, which must come down before higher taxes make sense.
BMW points to its own momentum. Electric car sales rose more than 200% in 2025, and across BMW and MINI total car sales grew 14.4% to 18,001 units. Electric penetration in its range reached about 21%, climbing to 23% in the fourth quarter as supplies improved. With three new electric models planned, the company expects that share to reach roughly 25 per cent.
The Budget will reveal whether the EV tax slab is left alone, and that answer will shape near-term pricing and adoption as more electric cars arrive.
On Thursday, BMW Group India made a single request of the government ahead of the Union Budget: leave the 5% GST on electric vehicles where it is. Hardeep Singh Brar, the company's president and chief executive officer, put the ask to PTI in an interview, saying any further hike would be detrimental to the industry.
Brar framed the request as nearly the only one he had. He said the government had done a fantastic job managing the overall economy and keeping growth from dropping below the 7 per cent mark, which he called very important for the country. He said he had no further expectations beyond that. What worried him, he said, was that talk of raising the GST on these vehicles keeps resurfacing.
His argument rests on how small the electric market still is in India. By his account, EVs make up just 4% of the overall passenger vehicle market, against more than 10% in developed countries and about 40% in China. India, he said, is probably among the lowest in EV penetration. Until the country reaches an inflection point where people begin adopting EVs in numbers, he said, a tax increase would do real damage.
He tied the timing to batteries as well. Until battery costs come down, Brar said, raising the GST would be very detrimental to the industry. The formal request to the government, he added, is to hold the rate for EVs at the current 5%.
BMW has its own numbers to point to. Its electric car sales rose by more than 200% in 2025. Across its two brands, BMW and MINI, total car sales grew 14.4% year-on-year to 18,001 units.
Within BMW's own range, Brar said electric penetration is about 21%, and in the fourth quarter it climbed to 23% because supplies improved. The company plans to add three new electric models, which he expects to lift that share to roughly 25 per cent.
More broadly, the group intends to launch 10 models this year. Six of them are entirely new, and four are existing models with major changes.
The Budget will show whether the EV GST slab is left alone. The answer will bear on near-term EV pricing and adoption, just as BMW prepares to bring more electric cars to market.
Citations marquantes
The only request would be not to touch the GST slab of EVs, because it keeps coming back that the GST on these vehicles will be increased.— Hardeep Singh Brar, President and CEO, BMW Group India, to PTI
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