Will Budget 2026 make EVs costlier? BMW reacts

German luxury carmaker BMW has urged the Indian government to retain the current 5 per cent GST on electric vehicles (EVs) in the upcoming Union Budget, warning that any hike at this stage could slow down the growth of the electric mobility sector in the country. The company believes that India is still in the early phase of EV adoption and that keeping EVs affordable is essential to encourage more people to make the switch.

BMW Group India President and CEO Hardeep Singh Brar said that while the government has done a “fantastic job” in managing the economy and maintaining strong growth rates, there is one key request from the automobile industry — do not increase GST on EVs. According to him, there are recurring discussions about a possible GST hike on electric vehicles, and if such a move happens, it would be “very detrimental” for the industry.

Brar explained that the cost of manufacturing EVs remains 40–50 per cent higher than internal combustion engine (ICE) vehicles mainly because of the high price of batteries. Until battery costs fall significantly, EVs will continue to be more expensive to produce, and higher taxes would make them even less affordable for consumers. He added that India’s EV penetration is still low, with electric vehicles forming around 4 per cent of the total passenger vehicle market, while the figure is above 10 per cent in developed countries and nearly 40 per cent in China. Given this reality, he said, India has not yet reached the “inflection point” where EV adoption becomes self-sustaining.

BMW had a strong year in 2025, recording an over 200 per cent jump in electric car sales, along with 14.4 per cent overall growth in combined BMW and MINI car sales, reaching 18,001 units. The company plans to carry forward the momentum this year by launching 10 new products, including three new electric cars, which are expected to increase the share of EVs in its portfolio to around 25 per cent. BMW already has around 21 per cent EV penetration within its lineup, which went up to 23 per cent in the last quarter due to improved supplies.

The company is also focusing on expanding its presence beyond big cities. BMW’s sales and service network currently spans about 40 cities with nearly 100 touchpoints, and it plans to add at least 10 more cities next year.