Boost for electric and hybrid cars in India with INR 1.5 Lakh subsidy
Indian Express reported that Electric/hybrid cars (XeVs) and two-wheelers could become attractive options for the Indian buyer, with the Centre planning to offer fairly large subsidies ranging from INR 8,000 up to INR 12 lakh.
The ministry of heavy industries and the auto industry have now agreed on the subsidy ceiling for XeVs with a view to pushing demand for the nascent segment. They hope this will result in a manufacturing and research base for vehicles running on alternative/eco-friendly fuels.
The move will give a boost to homegrown auto majors Mahindra & Mahindra and TATA Motors, both of which have been developing electric and hybrid technologies.
M&M, which has launched the e2o electric car is waiting for incentives before it launches other XeV models like an electric Verito and Maxximo LCV.
TATA has already developed a CNG-hybrid bus, running in Madrid, but is yet to be sold in India because of the high price of over INR 1 crore.
XeV cars and SUVs, which are priced at INR 7.5 lakh onwards, are expected to get subsidised by up to INR 1.5 lakh, while XeV bikes and scooters (starting INR 40,000) will likely get subsidised to a maximum of INR 30,000.
Hybrid buses will get a big boost with a planned subsidy ceiling of around INR 12 lakh, while XeV light commercial vehicles will likely get subsidised by INR 1 lakh. The exact subsidy will depend on various factors like range, battery size and the actual factory price of the vehicle.
A government official said that “The idea is that 30-40% of the price differential of XeV over petrol/diesel cars will be met by the subsidy. After that, such vehicles make sense because the running cost is very low. The subsidy is expected to cost the government abut Rs 12,000 crore over six years.”
Official said that “Discussions on the subsidy had been going on for a while with the auto industry, but automakers were not fully satisfied with the proposal. However, there is now widespread agreement and the heavy industries ministry will present the final framework to the expenditure finance committee in a month. After that, it will seek Cabinet approval when the new government takes charge.”
As per the plan, the Centre is expected to directly re-imburse the automaker for every XeV sold through an online platform.
The source said that “There will be two things needed for proof of sale. First, at the factory gate where the excise duties are paid and then, the registration for the vehicle.”
Source – Indian Express