BMW India CEO Urges Removal of EV Road Tax Caps to Spur Adoption

BMW India CEO Vikram Pawah has called on state governments to scrap caps on road tax waivers for electric vehicles, arguing that the limits are slowing adoption. Pawah made the remarks at a press briefing in Mumbai on Friday, ahead of the launch of the BMW iX1 electric SUV.

Several Indian states, including Maharashtra, Delhi, and Tamil Nadu, offer road tax exemptions for EVs but only up to a certain price threshold. In Maharashtra, for instance, the waiver applies only to EVs priced below Rs 30 lakh. BMW's upcoming iX1 is expected to be priced well above that.

"The caps create an uneven playing field," Pawah said. "A customer buying a Rs 50 lakh EV pays full road tax, while someone buying a Rs 25 lakh EV pays nothing. That's not how you encourage a shift to clean mobility."

Pawah's comments come as India pushes to grow its EV market. Electric cars made up just 1.3% of total passenger vehicle sales in 2025, according to industry data. The government wants that share to reach 30% by 2030.

Luxury EVs left out

Road tax in India is levied by states and can range from 10% to 20% of a vehicle's ex-showroom price. For a luxury EV, that can mean several lakh rupees. Pawah argues that removing the caps would make high-end EVs more affordable and help build a second-hand market, which in turn would make electric cars accessible to more buyers.

Not everyone agrees. A senior official at the Ministry of Heavy Industries, who spoke on condition of anonymity, said the caps are meant to target mass-market adoption. "Subsidising luxury cars isn't a priority when we have limited fiscal space," the official said. "The goal is to get more electric two-wheelers and small cars on the road."

Other luxury automakers have echoed Pawah's concerns. Mercedes-Benz India and Audi India have both lobbied for uniform EV policies across states. In 2025, Mercedes-Benz India's MD, Santosh Iyer, told reporters that inconsistent state taxes were a "big headache" for planning.

BMW's EV push

BMW currently sells three electric models in India: the i4 sedan, the iX SUV, and the i7 sedan. The iX1, which will be assembled locally in Chennai, is expected to be the company's most affordable EV yet. Local assembly will help BMW avoid hefty import duties, but the road tax issue remains.

Pawah said BMW is committed to India's EV transition but needs policy support. "We're not asking for subsidies. We're asking for a level playing field," he said. "If you want cleaner air, you have to make it easier for people to buy electric."

The CEO also pointed to charging infrastructure as a barrier. India has about 5,000 public charging stations, most of them in cities. BMW has installed over 100 chargers at its dealerships, but Pawah admitted that's not enough. "We need a national grid for charging, not just pockets of excellence," he said.

State governments have been slow to revise EV policies. Maharashtra's current EV policy, introduced in 2021, is due for revision in 2026. A spokesperson for the state transport department said a committee is reviewing the tax structure but declined to give a timeline.

For now, BMW's iX1 will launch without any state-level tax relief for most buyers. Pawah hopes that changes soon. "The technology is ready. The cars are ready. The only thing missing is the policy," he said.