India eyes 18–28% GST on premium EVs; Tesla, BMW hit
India considers higher GST for premium EVs: impact on Tesla, BMW, Mercedes, BYD
India eyes 18–28% GST on premium EVs; Tesla, BMW hit
An Indian committee proposes lifting GST on premium EVs to 18–28% or even 40%, threatening Tesla’s Model Y and rivals. What GST Council’s decision could mean.
2025-09-03T10:46:40+03:00
2025-09-03T10:46:40+03:00
2025-09-03T10:46:40+03:00
An Indian tax committee has proposed a sharp hike in GST rates on high-end electric vehicles, a move that could seriously dent sales for Tesla, BMW, Mercedes-Benz, and BYD. Today, all EVs in the country are taxed at 5%. The new recommendation points to 18% for cars priced between 2 and 4 million rupees ($23,000–$46,000) and 28% for models costing more than $46,000.Tesla has only just launched the Model Y in India at about $65,000—exactly the kind of car that would be in the crosshairs. Mercedes and BMW are also pushing premium EVs, while China’s BYD is bringing higher-spec versions to market. For the top end of the segment, the timing could hardly be tougher.Domestic players Tata and Mahindra said a higher levy would slow the shift to clean mobility. BMW India likewise warned that steeper rates could derail plans to expand local production. The message to premium buyers and manufacturers alike is anything but confidence-boosting.The final decision rests with the GST Council, which meets on September 3–4. If expensive EVs are moved into a new “luxury” bracket with tax of up to 40%, sticker prices in India would climb even further—especially given that imported cars already carry tariffs nearing 100%.Meanwhile, India’s EV market continues to expand: from April to July, sales jumped 93% to 15,500 units, and electric cars reached a 5% share of the overall market. That momentum makes the stakes of this tax rethink particularly high.
India GST hike, premium EVs, Tesla Model Y India, BMW, Mercedes, BYD, GST Council decision, EV taxes India, luxury EVs, 18–28% GST, 40% tax, import tariffs, EV market share India, Tata, Mahindra
2025
Michael Powers
news
India considers higher GST for premium EVs: impact on Tesla, BMW, Mercedes, BYD
An Indian committee proposes lifting GST on premium EVs to 18–28% or even 40%, threatening Tesla’s Model Y and rivals. What GST Council’s decision could mean.
Michael Powers, Editor
An Indian tax committee has proposed a sharp hike in GST rates on high-end electric vehicles, a move that could seriously dent sales for Tesla, BMW, Mercedes-Benz, and BYD. Today, all EVs in the country are taxed at 5%. The new recommendation points to 18% for cars priced between 2 and 4 million rupees ($23,000–$46,000) and 28% for models costing more than $46,000.
Tesla has only just launched the Model Y in India at about $65,000—exactly the kind of car that would be in the crosshairs. Mercedes and BMW are also pushing premium EVs, while China’s BYD is bringing higher-spec versions to market. For the top end of the segment, the timing could hardly be tougher.
Domestic players Tata and Mahindra said a higher levy would slow the shift to clean mobility. BMW India likewise warned that steeper rates could derail plans to expand local production. The message to premium buyers and manufacturers alike is anything but confidence-boosting.
The final decision rests with the GST Council, which meets on September 3–4. If expensive EVs are moved into a new “luxury” bracket with tax of up to 40%, sticker prices in India would climb even further—especially given that imported cars already carry tariffs nearing 100%.
Meanwhile, India’s EV market continues to expand: from April to July, sales jumped 93% to 15,500 units, and electric cars reached a 5% share of the overall market. That momentum makes the stakes of this tax rethink particularly high.
