German luxury carmaker BMW has become the third-largest electric vehicle (EV) manufacturer in the world in the first half of this year, just behind Tesla and China’s BYD. Despite its success, BMW didn’t meet its EV sales targets due to reduced customer interest in key markets like China and cuts in subsidies in other countries.
Subsidy Impact on EV Adoption
Jean Phillipe Parain, Senior Vice President for the Asia-Pacific, Eastern Europe, Middle East, and Africa regions at BMW, explained, “EV adoption is closely tied to a country’s EV policies. We’ve seen subsidies being reduced in some markets because of budget issues.”
He noted, “When subsidies go up, EVs become more popular. For example, in Australia, EV use went from 3% in 2023 to an expected 25% in 2025 due to clear EV policies. However, globally, due to budget constraints, adoption has been slower than expected. We planned for stronger EV sales growth but had to adjust our expectations.”
BMW’s Presence in India
In India, BMW’s EVs are used as much as their internal combustion engine (ICE) vehicles, said Vikram Pahwa, President of BMW Group India. BMW recently launched four new products in India, including the electric scooter CE04, the long-wheelbase BMW 5 Series, and the electric Mini Countryman and Mini Cooper S. Deliveries will start in September.
Parain said, “Our competitors are struggling with the shift to EVs. Porsche’s EV sales dropped by 50%, and Mercedes and Audi are also facing challenges. We believe our better products explain our growth. We’ve invested in dealer partnerships, infrastructure, and charging stations.”
Flexibility and Future Investments
Parain emphasized the need for flexibility in EV adoption across different markets, a strategy also supported by Mercedes Benz. “Flexibility is crucial because while we know EV adoption will grow, the pace is uncertain.”
He added, “We believe in EVs and are heavily invested. We will soon introduce a new generation of electric vehicles.”
Policy Recommendations for India
Parain suggested that the Indian government should focus on incentivizing EVs rather than hybrids to avoid confusing investors. He also stressed the importance of subsidies until charging infrastructure improves, making EVs a natural choice for customers.
“You see stronger adoption with strong incentives. Without them, customers prefer the technology they know, which is likely an ICE vehicle. Therefore, incentives are vital for this transition,” Parain explained.
He also warned against frequent policy changes, saying, “Changing schemes too often makes it hard for investors to plan. Including hybrids complicates the business case and makes it harder to predict outcomes. The government must be careful with policy changes.”
Parain’s insights highlight the importance of consistent policies and incentives to support the transition to EVs.
