Volvo, Audi, Merc bet high on electric and hybrid cars

NEW DELHI (TIP): With regulation on pollution from automobiles getting stringent world over, carmakers finally moving towards electrics, but not in a hurry.

Companies such as Mercedes-Benz, Audi, and Volvo plan to start off with eco-friendly models of vehicles in their portfolio.

On Wednesday, Swedish carmaker Volvo launched India’s first plug-in hybrid SUV, XC90 T8 Excellence. On full charge, the car can cruise for 40km without consuming a drop of fuel.

“Delhi is one of the most polluted cities in the world, and so there is a need for a plug-in hybrid car,” said Tom von Bonsdorff, managing director of Volvo India.

To be sure this not an all-electric vehicles. Volvo will continue to have internal combustion gasoline engines alongside battery linked engines, before India builds enough charging stations. The all-electric cars run for only 100-150km.

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Moreover, the technology is not cheap. And apart from the 7.5% rebate on value added tax in Delhi, the government does not give a subsidy on electric vehicles. In Europe, owing to subsidy, electric cars cost the same or even less than gasoline models. That’s another reason why electric technology will first come to luxury cars. The price of a mid-size sedan (with an average price of ?10 lakh) becomes costlier by nearly 50% with electric technology. The same differential is 6-12% of a luxury car’s value.

“Next-generation technology is first introduced in high-end cars… Thereafter, the adoption happens faster in the mass market,” said Wilfried Aulbur, India head of consulting firm Roland Berger that is headquartered in Munich.

Volvo aims to sell a million electrified cars by 2025. The Centre, too, aims to get everyone to buy an electric car by 2030.

German luxury car brand Audi is looking at a whole range of electric vehicles for India. “Some strategic models will come first. But it is unlikely that all models will have an electric vehicle,” said Joe King, head of Audi India. “But a lot of work needs to be done before we finally bring in the cars.”

Nissan, Japanese auto major, will launch the Xtrail in October. “Some countries in northern Europe and in some states in the US, electric cars are working well, because the governments are giving subsidy,” said Guillaume Sicard, president of Nissan India.

Mercedes-Benz, which is also working on a portfolio of electric cars, too, is studying the market but is waiting for the infrastructure to come up.

As far as King is concerned, “In the next 10 years, Audi’s electric car portfolio will grow rapidly,” he said.

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