States should not cap road-tax benefits for EVs based on price: BMW India

State governments like Delhi should not cap road-tax benefits for electric vehicles (EVs) based on their price, as such limits can push luxury-car buyers to neighbouring states and weaken the transition to cleaner vehicles in pollution-affected regions, said BMW Group India President and CEO Hardeep Singh Brar on Friday.

Delhi’s new EV policy, which came into effect on July 1, limits full road-tax and registration-fee exemption to electric cars priced up to Rs 30 lakh.

In the first half of 2026, EVs accounted for 26 per cent of BMW's total volume sales in India. Brar said he expected the share to cross 30 per cent in the second half of 2026 and reach 35-40 per cent next year.

“The state government needs to follow what the central government is doing. So, road tax exemption should be there without any cap,” Brar said during a media roundtable after launching the 2026 7 Series facelift in India at a starting price of Rs 1.95 crore.

Brar said the different approaches of the Centre and states can confuse customers and undermine the broader objective of encouraging electric vehicles.

“The narrative from the central government is let's bring more EV so that it reduces your oil import bill and also the pollution. And Delhi, we all know is among the most polluted states,” he said.

Brar also stated that Delhi risks losing luxury-car buyers to neighbouring Haryana and Uttar Pradesh, where the tax burden can be lower. He said high-end customers often have the flexibility to register their vehicles outside Delhi.

Moreover, customers can just choose not to buy an electric car in Delhi and instead buy a petrol or a diesel car with a higher-capacity engine, which would pollute more. "So in a scenario like this, I don't think the price cap makes sense,” Brar said.

Brar said this matters because Delhi-NCR is among India’s biggest luxury-car markets, with luxury vehicles accounting for 3-5 per cent of total car sales in the national capital.

India has also become BMW's fastest-growing market globally this year, Brar said. The country has moved into BMW's top 20 markets worldwide, from outside the top 20 last year. The company now aims to move India into the top 15, reflecting the growing importance of the Indian market for the luxury carmaker.

BMW's luxury-car sales are also spreading beyond India's biggest cities. The top 10 markets account for around 70 per cent of overall volumes and 65-70 per cent of EV volumes. Five years ago, the top 10 accounted for about 80 per cent of sales, suggesting that Tier-2 and Tier-3 markets are gaining importance for the company.

BMW’s electric share has risen as petrol and diesel lose ground. As the government is pushing the industry to move towards cleaner fuels, Brar said diesel vehicles are likely to face the earliest sales pressure among internal-combustion engine vehicles. However, BMW will continue selling diesel models as long as customers demand them.

In response to a question about recent commodity price increases, Brar said BMW India has already increased vehicle prices three times this year, with the cumulative increase at around 4-5 per cent. The company is considering another increase, potentially next month, because of currency and commodity-cost pressures.