Indian luxury EV adoption fell 2-3% post-GST 2.0, as ICE cars became more affordable.

After the GST 2.0 tax regime went into effect in September 2025, EV adoption in India's luxury car segment fell by two to three percentage points because smaller internal combustion engine vehicles were more affordable due to lower taxes. Price differences between EVs and ICE models grew in the entry-level luxury market, where the change was most noticeable. The overall EV penetration remained below 30%, despite the fact that some brands, such as BMW and Audi, reported significant growth in EV sales. Industry leaders cited changes in tax laws as a major factor influencing consumer choices.