TL;DR
Luxury EV penetration in India has decreased by 3% following GST 2.0 reforms, as ICE vehicles offer better total cost of ownership, particularly impacting entry-level luxury EVs.
Electric Vehicle (EV) adoption within India's luxury car segment has seen a nearly 3 percentage point drop in the era of GST 2.0. This shift is largely attributed to internal combustion engine (ICE) vehicles now offering a more attractive total cost of ownership, making them more competitive against luxury EVs.
The impact is particularly noticeable in the entry-level luxury segment, where the price difference between EVs and ICE models has widened under the revised GST rates implemented in September 2025. While top-end luxury EVs (above Rs 1.5 crore) exhibit lower price sensitivity, the overall luxury EV penetration has decreased from around 8% to 5% for some manufacturers.
