Govt to give incentives to electric vehicle makers to rev up sales…..Shally Seth
The ministry of new and renewable energy will pay up to 20% of the ex-factory price of these vehicles
The ministry of new and renewable energy will pay up to 20% of the ex-factory price of these vehicles
The ministry of new and renewable energy has decided to offer incentives to electric vehicle makers in the current and the next financial years in a bid to boost the sales of the environment-friendly vehicles.
The ministry will pay up to 20% of the ex-factory price of these vehicles, which the manufacturers are expected to pass on to buyers, said the Society of Manufacturers of Electric Vehicles (SMEV), a lobby group.
In return, the manufacturers will have to use at least 30% indigenous content in the vehicles, maintain a sizeable retail operation and after-sales service outlets.
The cap on the incentive will be Rs.4,000 for a low speed electric two-wheeler, Rs.5,000 for a high speed electric two-wheeler and Rs.1 lakh for an electric car.
The ex-factory price of electric two-wheelers is Rs.26,000-43,000, while the price of electric cars manufactuerd by Mahindra Reva Electric Vehicles Pvt. Ltd, Indias only maker of such cars, is Rs.3.5 lakh.
Some 85,000 electric vehicles were sold in the country in 2009-10.
SMEV president Sohinder Gill expects sales to rise by a marginal 2-3% in the current fiscal.
The incentive scheme will allow manufacturers to price their products more competitively, but its impact will kick in only next year, Gill said. This will double the sales of electric two-wheelers in India.
Sohail Akhtar, deputy director at the ministry of new and renewable energy, said the ministry is working on a broader policy to encourage the use of electric vehicles in collaboration with other ministries.
The incentive scheme may be extended as part of the 12th five-year plan, which begins in 2012-13, he added.
Its a bold move by the ministry, said R. Chandramouli, chief operating officer of Mahindra Reva.
On 5 November, the company announced plans to sell its car in eight more Indian cities.
Chandramouli said Reva will save Rs.70,000-75,000 on each car thanks to the incentive scheme, and will thus offer a 20% discount to buyers.
Kumar Kandaswamy, senior director at consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd, said the incentive may not boost sales significantly until prices can be brought on a par with vehicles that run on conventional fuel.
Our belief is electric vehicles will continue to be in the niche segment in India and other emerging markets, he said.