India proposes tax benefits for electric vehicles to promote sales

India wants electric vehicles to account for 30% of all passenger vehicle sales in India by 2030. (File/AFP)
Updated 09 July 2019
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India proposes tax benefits for electric vehicles to promote sales

  • Electric cars account for less than 1% of new vehicle sales due to a lack of charging infrastructure and the high cost of batteries
  • India, the world’s third-biggest emitter of greenhouse gases, is home to 14 of the world’s most polluted cities

MUMBAI/NEW DELHI: India proposed tax waivers on Friday on the purchase of electric vehicles and removed import taxes on some auto components to help boost sales and reduce its dependence on fossil fuels.
India, the world’s third-biggest emitter of greenhouse gases, is home to 14 of the world’s most polluted cities, including the capital New Delhi, with its toxic air claiming more than one million lives in 2017.
Finance Minister Nirmala Sitharaman, presenting the federal budget to parliament, said buyers of electric vehicles will receive an income tax deduction of 150,000 rupees ($2,189.30) on interest paid on loans taken out to them.
She added that the government will also withdraw import tariffs on some parts used to make electric vehicles.
“Considering our large consumer base, we aim to leapfrog and envision India as a global hub of manufacturing of electric vehicles,” she said in the budget speech.
While India wants electric vehicles to account for 30% of all passenger vehicle sales in India by 2030, electric cars account for less than 1% of new vehicle sales due to a lack of charging infrastructure and the high cost of batteries.
Sitharaman said the government has already proposed reducing a national goods and services tax (GST) from 12% to 5% to encourage sales. The plan is to have “mega-manufacturing plants” to make lithium storage batteries and solar electric charging infrastructure.
“The government clearly wants to create an entire ecosystem for e-mobility in the country,” said Puneet Gupta, associate director at IHS Markit.
As part of its program to cut pollution in its bustling cities, the Finance Minister also announced that it would shut down old and inefficient power plants and look for ways to increase the use of natural gas-based power.


BMW picks insider Zipse as CEO to catch up with rivals

Oliver Zipse
Updated 19 July 2019
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BMW picks insider Zipse as CEO to catch up with rivals

  • German giant has lost ground to Mercedes-Benz and Tesla as tech steps up

FRANKFURT: BMW has named Oliver Zipse as its new CEO, continuing the German carmaker’s tradition of promoting production chiefs to the top job even as the auto industry expands into new areas such as technology and services.
Hailing Zipse’s “decisive” leadership style, BMW hopes the 55-year-old can help it win back its edge in electric cars and the premium market  from rival Mercedes-Benz.
But some analysts questioned whether Zipse was the right choice with new fields such as software and services like car-sharing becoming increasingly important.
“What is intriguing is the cultural bias to appoint the head of production. It works sometimes but ... being good at building cars is not a defining edge the way it was 20 years ago,” said Jefferies analyst Philippe Houchois.
Current CEO Harald Krueger, and former chiefs Norbert Reithofer, Bernd Pischetsrieder and Joachim Milberg were all former production heads.
Zipse joined BMW as a trainee in 1991 and served as head of brand and product strategies and boss of BMW’s Oxford plant in England before joining the board.
He will become chief executive on Aug. 16, taking over from Krueger who said he would not be available for a second term.
“With Oliver Zipse, a decisive strategic and analytical leader will assume the Chair of the Board of Management of BMW. He will provide fresh momentum in shaping  the future,” said Reithofer.
Zipse helped expand BMW’s efficient production network in Hungary, China and the US, in a move that delivered industry-leading profit margins.
Under Krueger, BMW was overtaken in 2016 by Mercedes-Benz as the best-selling luxury car brand.
It also had an early lead over US  rival Tesla in electric cars, but scaled back ambitions after its i3 model failed to sell large numbers.
Reithofer initially championed Krueger’s low-key consensus-seeking leadership, but pressured him to roll out electric vehicles more aggressively, forcing Krueger to skip the Paris Motor Show in 2016 to reevaluate BMW’s electric strategy.
Krueger’s reluctance to push low-margin electric vehicles led to an exodus of talented electric vehicle experts, including Christian Senger, now Volkswagen’s (VW) board member responsible for software, and Audi’s Markus Duesmann, who is seen as a future CEO of the company.
Both were poached by VW CEO Herbert Diess, a former BMW board member responsible for research who was himself passed over for BMW’s top job in 2015.
VW has since pushed a radical 80 billion euro ($90 billion) electric car mass production strategy, and a sweeping alliance with Ford.

Other skills
“A CEO needs to have an idea for how mobility will evolve in the future. This goes far beyond optimising an existing business,” said Carsten Breitfeld, chief executive of China-based ICONIQ motors, and former BMW engineer. “He needs to build teams, attract talent, and promote a culture oriented along consumer electronics and internet dynamics.”
German manufacturers have dominated the high-performance market for decades, but analysts warn shifts towards sophisticated technology and software is opening the door to new challengers.
“Tesla has a lead of three to four years in areas like software and electronics. There is a risk that the Germans can’t catch up,” UBS analyst Patrick Hummel said.
Germany’s Auto Motor und Sport car magazine, normally quick to champion German manufacturers, this week ran a cover questioning BMW’s future.
“Production expertise is important, but if you want to avoid ending up being a hardware provider for Google or Apple, you need to have the ability to move up the food chain into data and software,” a former BMW board member said.