Quick Takeaways
- Volvo Car India’s EVs continue to command a solid one-fourth share of its total sales even after a major tax regime shift.
- GST 2.0 is simultaneously lifting demand for Volvo’s mild-hybrid luxury SUVs while keeping EV adoption stable.
Volvo Car India EV sales continued to hold firm, with electric vehicles accounting for nearly one out of every four cars sold in the country, even as the government’s GST 2.0 framework made the company’s mild-hybrid luxury SUVs more attractive for buyers in the premium segment.
According to Volvo Car India Managing Director Jyoti Malhotra, GST 2.0 has played a major role in reorganizing the luxury vehicle market by simplifying and rationalizing the tax structure. The company’s sales mix, he said, has remained stable, with Volvo Car India EV sales consistently representing about 25 percent of total volumes.
Volvo Car India EV Sales Driven by EX30 and Platform Transition
Malhotra explained that this balance is being shaped by two main factors: the successful market entry of the Volvo EX30 electric SUV and a short-term adjustment in the availability of the Compact Modular Architecture (CMA) platform as Volvo aligns with newer global production cycles.
These changes have not diluted Volvo’s electrification strategy. Instead, they represent a steady base from which the company plans to accelerate its electric push. Volvo expects to move into a more aggressive EV rollout starting in 2026, reinforcing its long-term commitment to a fully electric portfolio.
GST 2.0 Lifts Volvo Car India EV Sales and Hybrid Demand
While the government continues to levy only 5 percent GST on electric vehicles to encourage electrification, GST 2.0 has also reduced the tax burden on certain luxury internal combustion and mild-hybrid vehicles. This dual impact helped Volvo’s refreshed ICE portfolio, including its flagship XC90 and XC60, record strong double-digit monthly sales growth after the new tax regime came into effect.
The combination of lower effective taxation and strong festive-season demand has made Volvo’s mild-hybrid SUVs a more attractive value proposition, even as buyers increasingly look toward electrified options for long-term ownership.
Pricing Outlook and Market Conditions
Looking ahead, Volvo expects 2026 to be a highly dynamic year for the luxury automotive sector. With foreign exchange volatility and other cost pressures in play, the company may consider price adjustments for some models. However, the focus on balancing profitability with volume growth remains central to its India strategy.
How GST 2.0 Reshaped the Luxury Auto Market
Under the revised GST structure introduced last September:
now attract an 18 percent GST rate, down from the earlier 28 percent plus cess.
Vehicles above 1,200 cc and longer than 4,000 mm fall under a 40 percent GST slab, replacing the earlier 28 percent GST plus a cess ranging between 15 and 22 percent.
For Volvo, this has meant stronger competitiveness for its mild-hybrid SUVs while maintaining momentum in Volvo Car India EV sales, creating a balanced growth path across both electric and electrified ICE segments.
According to Volvo Car India Managing Director Jyoti Malhotra, GST 2.0 has played a major role in reorganizing the luxury vehicle market by simplifying and rationalizing the tax structure. The company’s sales mix, he said, has remained stable, with Volvo Car India EV sales consistently representing about 25 percent of total volumes.
Volvo Car India EV Sales Driven by EX30 and Platform Transition
Malhotra explained that this balance is being shaped by two main factors: the successful market entry of the Volvo EX30 electric SUV and a short-term adjustment in the availability of the Compact Modular Architecture (CMA) platform as Volvo aligns with newer global production cycles.
These changes have not diluted Volvo’s electrification strategy. Instead, they represent a steady base from which the company plans to accelerate its electric push. Volvo expects to move into a more aggressive EV rollout starting in 2026, reinforcing its long-term commitment to a fully electric portfolio.
GST 2.0 Lifts Volvo Car India EV Sales and Hybrid Demand
While the government continues to levy only 5 percent GST on electric vehicles to encourage electrification, GST 2.0 has also reduced the tax burden on certain luxury internal combustion and mild-hybrid vehicles. This dual impact helped Volvo’s refreshed ICE portfolio, including its flagship XC90 and XC60, record strong double-digit monthly sales growth after the new tax regime came into effect.
The combination of lower effective taxation and strong festive-season demand has made Volvo’s mild-hybrid SUVs a more attractive value proposition, even as buyers increasingly look toward electrified options for long-term ownership.
Pricing Outlook and Market Conditions
Looking ahead, Volvo expects 2026 to be a highly dynamic year for the luxury automotive sector. With foreign exchange volatility and other cost pressures in play, the company may consider price adjustments for some models. However, the focus on balancing profitability with volume growth remains central to its India strategy.
How GST 2.0 Reshaped the Luxury Auto Market
Under the revised GST structure introduced last September:
- Petrol, LPG, and CNG vehicles below 1,200 cc and under 4,000 mm
- Diesel vehicles up to 1,500 cc and under 4,000 mm
now attract an 18 percent GST rate, down from the earlier 28 percent plus cess.
Vehicles above 1,200 cc and longer than 4,000 mm fall under a 40 percent GST slab, replacing the earlier 28 percent GST plus a cess ranging between 15 and 22 percent.
For Volvo, this has meant stronger competitiveness for its mild-hybrid SUVs while maintaining momentum in Volvo Car India EV sales, creating a balanced growth path across both electric and electrified ICE segments.
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