As a part of post-election union budget, Finance Minster Nirmala Sitharaman announced a proposal to reduce the GST (Goods and Services Tax) for electric vehicles from 12% to 5%. The GST rate cut is set to come into effect from 1st of August 2019 and the move will make electric vehicles that are already in the market significantly cheaper.
The Hyundai Kona electric compact crossover recently went on sale in India at a price of INR 25.3 lakh, ex-sh. The South Korean automaker hinted at the time of launch that once the GST rate cut kicks in, the Kona could become cheaper by around INR 1.5 lakh. From August, Hyundai’s first electric vehicle in India is likely to carry a price tag of INR 23.8 lakh.
The reduction in price would certainly help the premium electric crossover to appeal to a wider audience base than before. Moreover the government has also announced that interest on car loans are eligible for tax concessions.
Over the full tenure of the loan, the total savings due to tax concession is estimated to result in savings of around INR 2.5 lakh. These benefits are over and above the FAME-II subsidy that electric vehicles receive (already reflected in the original price tag).
The Hyundai Kona aims to demonstrate the automaker’s prowess in the electric vehicle technology. It serves as a brand shaper for Hyundai and help in understanding the expectations of Indian customers from their EVs. Moving forward, Hyundai is expected to launch more affordable electric vehicles.
The Kona is powered by a PMSM (Permanent Magnet Synchronous Motor) which produces 136 hp and 395 Nm of torque. The power is transmitted to the wheels via a single-speed reduction gear. The motor is supported by a 39.2 kWh lithium-ion polymer battery which is good enough to offer an impressive range of 452 km. A single full charge takes around 6 hours and 10 mins via a normal AC socket. A DC fast charger can achieve 80% in 57 minutes.
Hyundai has managed to garner 120 bookings on day 1 which is a national-level record for an electric car. GST rate cut and tax concession on loan interest are expected to help Kona post sales performance.
