Volvo shifts gears, to offer both EVs & ICE models in India
The Swedish luxury carmaker had last year said it will henceforth sell only electric vehicles in India in its bid to have an all-electric portfolio by the turn of the decade. Volvo's strategy mirrors those of other global car makers like Jaguar Land Rover, and Mercedes Benz who are revising plans to have an all-electric product range.
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Speaking to ET, Jyoti Malhotra, managing director at Volvo Cars India said, globally too while the company intends to go all electric, timelines have now been pushed beyond 2030. 'The adoption rate (of electric vehicles) is different in different countries. And even within the country (in India), it's different across states,' said Malhotra.
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He said government policies are crucial in deepening EV penetration in India, with states that have waived off road taxes seeing higher adoption rates among customers.
'We will continue to drive in electric cars and have a launch lined up later this year itself. But at the same time, we will continue to focus on ICE,' said Malhotra.
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EVs currently contribute about 25% of Volvo's sales in India. The market for such eco-friendly luxury cars is however still small though it is growing, according to the company.
'About a year back, EVs had started losing steam. We are seeing some uptick in the segment in the last six months. But customer needs are different across regions,' said Malhotra.
'Home charging is extremely important for customer comfort when it comes to owning EVs. In cities, where there are high-rises, charging electric cars is challenging,' he said, adding Volvo is seeing stronger EV adoption in states like Kerala, Maharashtra, and Delhi where there are low-rises and state policies are conducive. He was speaking on the sidelines of the launch of the XC60 SUV model.
Globally, Volvo does have plug-in hybrids in its portfolio, but Malhotra said the company will only consider launching them in India if the tax structures are more conducive.
India currently levies a Goods and Services Tax (GST) rate of 5% on EVs, and 43% on hybrids.
Overall, Malhotra said luxury car sales in India, which had been outpacing the broader car market in the last few years, slowed in the first half of 2025 as volatile stock markets, and mounting geopolitical tensions hit demand among the country's rich, aspirational buyers. He however added that Volvo is on track to meet its sales target for this calendar year though industry growth is likely to be muted.
Per industry estimates, around 22,900 luxury cars were sold in the first half of 2025, a 1.8% rise from a year earlier.
Separately, Malhotra termed free trade agreements being inked or negotiated by the Indian government as a step in the right direction, which will help to grow the auto industry in the long run.
'The UK FTA has set a benchmark. While the one with the EU is still some time away, free trade agreements are good for the economy. India is seen as a market with growth potential. If any company were to invest in India today, they will only consider the scale available in the market here. With FTAs, the scale changes immediately as they open up access to many more markets globally,' he said, adding Volvo can also explore possibilities for expanding its footprint in India once the EU trade deal is finalised.
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