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Subsidy for electric cars will start from April ’14

Subsidy for electronic vehicles will start by April, 2014. The government has earmarked around Rs 12,000 crore as subsidy to be provided to electronic vehicle manufacturers in the next six-seven years, according to Ambuj Sharma, additional secretary, ministry of heavy industries and public enterprises.

“Our target is to have around six to seven million electric vehicles in the country by 2020,” he said.

“Around 35 per cent of differential manufacturing cost (differential cost of a diesel vehicle and electric vehicle) would be provided to the manufacturers. Reaming 65 per cent will come out of fuel efficiency,” said Sharma.

He said each year around Rs 2,000 crore would be provided to the industry as subsidy to electric and hybrid car manufacturers under the government’s 2020 plan.

“Electric vehicle manufacturers need subsidy as initially their cost of manufacturing is higher compared to other vehicle manufacturers. Till the country’s infrastructure improves for electric vehicle and cost of battery comes down the subsidy is a necessity,” Sharma added.

Earlier, Mahindra & Mahindra (M&M) had said the company would refrain from launching new electric vehicles in India in the absence of any government subsidy promised earlier, and look at export markets where government support for electric cars is available.
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