Electric vehicles in India to get Government subsidies

A sigh of relief for pure electric and hybrid vehicle makers in India as Government may soon sanction subsidies to make them as affordable as petrol and diesel powered cars. Environment cautious buyers may also be delighted as the grant extends to all segments of mobility from two-wheelers to public transport buses. Subsidies on electric vehicle ranges from Rs 8,000 to Rs 12 lakh, depending on vehicle segment and criteria, decided by government.

Mahindra XUV500 Hybrid at 2014 Delhi Auto ExpoHomegrown manufacturers of hybrid and EVs like Hero, Mahindra and Tata have been struggling to sprout in this segment because of their inevitable high pricing of greener product line. If said subsidy plan gets signed by new government after the ongoing general election, a sum of about Rs. 12,000 crore will be distributed over six years to help greener mobility reach people.

Subsidy for each product will be calculated based on factors like operational range, battery capacity, factory price of vehicle, and the like. Then, arrived allowance will be reimbursed to manufacturers through online portal upon proof of sale of each vehicle.

XeV scooters and bikes ranging from Rs 40,000 should be available for less than Rs. 30,000. Light commercial vehicles powered by electric technology should enjoy discount of about a lakh. Electric cars and SUVs priced above Rs. 7.5 lakhs should receive around Rs. 1.5 lakh price cuts. Hybrid buses will take the biggest chunk of subsidy, up to Rs. 12 lakhs.

This should help Mahindra Reva charge up their e2o electric car sales and undauntedly launch other XeV products like electric Verito (sedan), Maxximo (LCV) and hybrid XUV500. Maruti Suzuki will also get to benefit as it also has been working on hybrids. Swift Range Extender will be its first hybrid hatch, which is planned to be supplied to the Indian Government.

Tata on the other hand will get a chance to bring its CNG-hybrid bus to India, currently running in Madrid, Spain. Without subsidy, the buss would cost around Rs. 1 crore.

The subsidy plan was originally expected to be implemented from April 2013 in a phased manner. An estimation by a Booz & Co study indicated that market for more than 6 million XeVs could be created by 2020, helping save upto 25 lakh tonnes of fuel.

This patronage can create a healthy electric/hybrid competition in India, inviting foreign participation as well. Further, it will encourage research and development of alternative/eco-friendly fuel and vehicles in India.

Mahindra Verito Electric at 2014 Delhi Auto Expo

Source Financial Express