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July 19, 2024
Audi India Shifts Gears: Local EV Production in Sight 
Automobile

Audi India Shifts Gears: Local EV Production in Sight 

Mar 19, 2024

The Indian automotive industry is witnessing a significant shift towards electric vehicles (EVs). Major manufacturers are strategically maneuvering to capture a slice of this burgeoning market. Audi, the renowned German luxury carmaker, is no exception. While Audi India currently imports its entire EV range, a recent announcement by the company’s head indicates a potential shift towards local production.

Audi EV e-tron

Challenges of Imported EVs

One of the primary challenges faced by Audi, and other manufacturers relying on imports for their EV offerings in India, is the high cost associated with Completely Built Units (CBUs). These vehicles are subject to customs duties ranging from 60% to 100%, significantly inflating the final price for consumers.

Balbir Singh Dhillon, Head of Audi India, acknowledges this hurdle: “Currently, cars imported into India as Completely Built Units (CBUs) attract customs duty ranging from 60 per cent to 100 per cent”. This high import duty structure puts Audi’s EVs in a niche segment, catering to a limited customer base.

Local Production: A Catalyst for Growth?

Recognizing the need for a more accessible price point to expand its customer base, Audi India is actively exploring local EV production. Dhillon highlights ongoing discussions with Audi AG, the company’s global headquarters: “We are working with Audi AG very positively and hopefully at some point in time we will be able to announce this (local assembly of EV models)”.

Local production offers several advantages. Firstly, it allows Audi to bypass the hefty import duties, potentially leading to a significant reduction in the final selling price of their EVs. This would make Audi’s e-tron range more competitive and attract a wider audience. Secondly, local production can create employment opportunities and contribute to the growth of the Indian automobile industry.

Aligning with Global Ambitions

Audi’s local production ambitions in India align with the company’s global commitment to electric mobility. The Volkswagen Group, Audi’s parent company, has declared its intention to become a fully electric vehicle manufacturer by 2033. This strategic shift necessitates a robust global EV production network, and India, with its growing EV market, presents a promising opportunity.

The Q6 e-tron: A Glimpse into the Future

Audi recently unveiled the Q6 e-tron, a new EV positioned below the current Q8 e-tron range. This strategic move indicates the company’s focus on introducing more affordable EV models globally, potentially paving the way for local production in India. The Q6 e-tron boasts an impressive range of up to 625 kilometres and is expected to arrive in Indian shores early next year.

Looking Ahead: A Balancing Act

While local production offers promising prospects, there are factors to consider. Establishing a robust production facility requires significant investment and time. Additionally, Audi will need to ensure the quality and consistency of its locally produced EVs to maintain its brand reputation for premium quality.

A Charged Up Future for Audi in India

Audi’s exploration of local EV production in India signifies a significant development in the country’s electric vehicle landscape. The potential benefits are multifaceted – offering consumers a wider range of accessible EVs, boosting the domestic automobile industry, and aligning with Audi’s global commitment to electric mobility.

Whether or not Audi India will establish local production hinges on various factors, but one thing remains clear: The company is determined to play a key role in India’s electric vehicle revolution. As the Indian EV market continues its rapid growth, Audi’s strategic maneuvers in the coming years will be keenly watched by industry analysts and consumers alike.

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