BMW Urges Government to Retain 5% GST on Electric Vehicles in Upcoming Budget

Ahead of the forthcoming Union Budget, BMW Group India has called on the government to retain the existing 5% GST rate on electric vehicles. 

The company has cautioned that any increase could slow EV adoption, particularly as penetration levels in India remain relatively low and manufacturing costs continue to be higher than conventional vehicles.

BMW’s Position on EV Taxation

BMW has stated that the current GST structure for electric vehicles plays a key role in supporting demand. 

According to the company, frequent discussions around a potential tax increase create uncertainty for both manufacturers and buyers, which could affect the pace of transition towards electric mobility.

EV Adoption Levels in India

The company highlighted that electric vehicles account for only a small share of India’s passenger vehicle market when compared with developed economies and China. BMW believes that maintaining favourable tax treatment is necessary until adoption reaches a more sustainable level.

Cost Pressures in EV Manufacturing

BMW noted that electric vehicles remain significantly more expensive to manufacture than internal combustion engine vehicles, largely due to battery costs. 

The company indicated that until battery prices decline meaningfully, any increase in GST could place additional pressure on the sector.

Sales Performance and Growth Trends

BMW reported a rise in overall vehicle sales in 2025, supported by steady demand across its BMW and MINI brands. Electric vehicle sales saw a sharp increase during the year, contributing to a growing share of the company’s total volumes.

Long wheelbase models and SUVs continued to perform well, while the motorcycle segment also recorded growth following the introduction of new models.

Product Pipeline and Network Expansion

The group plans to introduce multiple new and updated models in the coming year, including additional electric vehicles. BMW also aims to expand its retail footprint by entering more cities and enhancing existing dealerships through its integrated retail strategy.

Outlook for Electric Vehicles

BMW expects its electric vehicle sales to grow faster than its conventional vehicle portfolio, supported by new launches and improved supply. The company anticipates a gradual increase in EV penetration over the medium term.

Read More: Tobacco Institute of India Appeals to Centre Over Cigarette Tax Hike.

Conclusion

BMW’s request to retain the 5% GST on electric vehicles reflects broader industry concerns around affordability and adoption. As the government prepares the Union Budget, the decision on EV taxation is likely to remain a key factor influencing investment and growth in India’s electric mobility segment.

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