India's luxury EV sales seeing a dip: What's the reason?
What's the story
The luxury segment has witnessed a decline in electric vehicle (EV) sales, with a nearly 3% drop in the GST 2.0 era. Industry experts attribute this trend to internal combustion engine (ICE) vehicles offering better total cost of ownership (TCO). The shift is particularly pronounced in the entry-luxury segment, where price differences between EVs and ICEs have widened under new GST rates.
Response
Mercedes-Benz India CEO comments on market shift
Mercedes-Benz India Managing Director and CEO Santosh Iyer told PTI that the shift is visible across both mass market and luxury segments. He said, "If I look at October and November (2025), it came down by 2 to 3% points across mass market as well as luxury." The executive added that this change is mainly due to ICE vehicles offering a much better TCO than EVs.
Segment analysis
Entry-luxury EV segment sees major fluctuation
Iyer noted that the biggest fluctuation is in the entry-luxury EV segment. He said for Mercedes-Benz India, its EVs are mostly in the top-end luxury segment. "In the top-end EV, the price sensitivity is a bit lower compared to what you see in the entry segment," he added. The CEO also revealed that while overall sales have 8% penetration of electric vehicles (EVs), it goes up to 20% for vehicles priced above ₹1.5 crore.
Sales performance
BMW sees growth in ICE and EV sales
BMW Group India President and CEO Hardeep Singh Brar said, "While GST 2.0 has made our ICE portfolio more attractive, we are seeing strong and sustained momentum in EV demand as well." He revealed that the firm passed on the entire benefit of GST 2.0 to customers with an average price reduction of 6.7% across its range. Brar also noted double-digit growth in ICE cars' sales year-on-year (YoY) for September-November, while BMW and MINI EVs have grown by 130% YoY.
Market adaptation
Audi India comments on GST 2.0 impact
Audi India's Brand Director Balbir Singh Dhillon said the market is still adapting to the GST 2.0 framework and its full impact will be seen in the coming year. He added, "In this evolving environment, our electric portfolio has continued to perform steadily." The executive also revealed that Audi's e-tron range has seen consistent demand with current allocations sold out under their global planning cycle.