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Does Indian Government give subsidy for electric vehicles?

Electrical vehicles have always been the topic of discussion in the recent past, as these vehicles are the future of the automobile industry and have many advantages.

Some of them being,

1)    Cost efficiency.

2)    Environmental factors.

3)    Reduction of non-renewable resources such as petrol etc.

So, it is important for all the countries to invest in these electrical vehicles, as a step towards a pollution-free environment.

This initiative was taken by various automobile companies across the globe in the year 2010, and the sales of the first mass-production were on December 19th, 2010.

Electric Vehicle

The government of India was also a part of the same and announced a subsidy of 950 million rupees for the electric vehicles. The government decided to provide benefits up to 20% on their ex-factory prices with a maximum benefit of rupees 100000 on electrical cars, rupees 4000 on 2 wheelers, rupees 5000 on high speed 2 wheelers, rupees 400000 on minibusses and rupees 60000 on 3 wheelers.

The Indian government is supporting the adaptation of plug-in electric vehicles.

Here the number of financial investors depends on the battery size and the vehicle of all-electric range.

In the year April 2014, the Indian government announced a new plan to provide subsidies for hybrid and electrical vehicles. The plan was to have subsidized up to 150000 rupees for electrical cars and 30000 rupees for 2 wheelers.

India currently has around 7 million electrical vehicles on the road, which was the target when this project was undertaken.

The Indian government had proposed initially that all manufacturers should switch to only electrical vehicles by 2025. Some of the steps taken to achieve this goal were to reduce the GST from 12% to 5% and to give rupees 1.5 lakhs exemption on loan taken for the purchase of an electrical vehicle. The government is also inviting the global companies to invest in the mega manufacturing plants for batteries as well as electrical vehicles. The government also said that the start-ups and the investment done in these electrical vehicles will be exempted from taxes. So these are the few initiatives taken by the government to improve the sales of the electrical vehicles in India.

Electric Vehicle

But the government had no talks about lowering the GST on conventional vehicles which might act as another motivation to invest on these electrical vehicles as the investors are piling up and the production rate is slow for the conventional vehicles and additional exercises such as an increase in the road taxes and the fuel costs might also add up to the reason for more investment in electrical vehicles.

So the conclusion would be that the government is providing enough subsidies for the electrical vehicles in India as they are the future of the automobiles in the country as well as the countries across the globe, but it still needs improvement as India behind many other countries that have invested more in this project.

Countries like Norway, Iceland, and Sweden are on top of the list of highest passenger electrical vehicle sales. The top three markets for electrical vehicles are China, the United States, and Norway with 1053000 EV unit sales, 361000 EV unit sales, and 73000 EV unit sales respectively.

According to the data, Iceland came second in the list with a 19 percent share, while Sweden was third with an 8 percent share. The Netherlands was fourth with about 7 percent followed by Finland and China with 4.7 percent and 4.4 percent, respectively.

The bottom four in the top 10 list were Portugal with 3.44 percent, Switzerland with 3.18 percent, Austria with 2.54 percent, and the United Kingdom with a 2.53 percent share. The full list ranks 18 countries on the said criteria, in which Ireland comes last with the least share of 1.57 percent.

 

Electric Vehicle

If we do some research we can clearly see that as of December 2018, China had the largest stock of highway legal light-duty plug-ins with over 2 million domestically built passenger cars. More than one million light-duty passenger plug-ins had been registered in Europe through June 2018, with Norway as the leading country with over 384,000 units registered by the end of 2019. Considering the same, Norway has the highest market penetration per capita in the world, and also has the world's largest plug-in segment market share of new car sales, 55.9% in 2019. Amsterdam has the highest density of electric vehicle charging stations in the world.

So with no mention in the list of countries, India still has a long way to go with respect to the subsidies given to the electrical vehicles and its production rate.


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