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India: Government to subsidise electric vehicles soon

In November, last year, the ministry of heavy industries had announced its intentions to roll out subsidies for electric vehicles by April 2014. Now, according to a report in the Financial Express, this plan might soon materialise, with the Centre planning to dish out subsidies ranging from Rs 8,000 up to Rs 12 lakh, under the National Electric Mobility Mission Plan.

Talking to FE, a government official said, “The idea is that 30-40 per cent of the price differential of XeV over petrol/diesel cars will be met by the subsidy. After that, such vehicles make sense because the running cost is very low. The subsidy is expected to cost the government abut Rs 12,000 crore over six years. Discussions on the subsidy had been going on for a while with the auto industry, but automakers were not fully satisfied with the proposal. However, there is now widespread agreement and the heavy industries ministry will present the final framework to the expenditure finance committee in a month. After that, it will seek Cabinet approval when the new government takes charge.”

Electric,hybrid cars and SUVs are expected to get subsidies up to Rs 1.5 lakh, while hybrid and electric bikes and scooters will likely get a subsidy of up to a maximum of Rs 30,000. The commercial auto sector will also benefit from this scheme with light vehicles getting Rs 1 lakh subsidy. The biggest benefit though, will be reaped by hybrid buses which will get a subsidy of around Rs 12 lakh. The Centre will directly re-imburse the car manufacturers for every hybrid and electric vehicle sold through an online platform. The exact subsidy amount for every vehicle will be predefined and will vary depending on various factors like range, battery size and the actual factory price of the vehicle.
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