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India: Subsidy withdrawal hits sales of electric vehicles

The withdrawal of subsidy by the Ministry of New & Renewable Energy (MNRE) on March 31 has drastically affected the sales of electric two-wheelers.

According to manufacturers, their business has fallen by over 70 per cent in the last three months, and, if the government does not take proactive steps, there are chances the industry might find itself in ‘hot water’

Manufacturers says they are also facing closure of dealership with around 250 dealers having already closed their operations in the last three months.
They expect the government to extend its support to the electric vehicle industry in bridging the gap between the discontinuation of MNRE incentive scheme and national electric vehicle policy by way of extension of MNRE Incentive Scheme.

They demanded that for the current financial year, the government should earmark Rs 50-60 crore as subsidy component for the consumers.

According to the entrepreneurs, electric vehicles, which were selling around 7,000 units per month before April 2012, has now come down to 2,500-3,000 units per month. It is worth mentioning that, according to the manufacturers, there are 16-17 electric two wheeler manufacture in India witha a combined installed capacity of 5 lakh unit per annum.

Hero Electric CEO Sohinder Gill said that the MNRE had, in November 2010, announced a financial incentive scheme for electric vehicle buyers. “This incentive was passed on upfront by the manufacturer to the customer and was later claimed by the government,” he told Business Standard.


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