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Electric vehicles to get cheaper by up to Rs 2.5 lakh

Electric vehicles to get cheaper by up to Rs 2.5 lakh

New Delhi, March 2, 2019 : With effect from April 2019, electric vehicles will get cheaper by Rs 20,000 to Rs 2.5 lakh, following the government’s go-ahead to Niti Aayog’s proposal to give purchase rebate as incentive to buyers. The move will help reduce India’s dependence on imported fuel and bring down pollution levels in the country.

The Union cabinet had on Thursday approved incentive of Rs 10,000 per KWH for purchase of all vehicles directly linked to battery size under the FAME II (Faster Adoption and Manufacturing of Electric Vehicle) scheme.

This will bring a saving of Rs 20,000-40,000 for two-wheelers fitted with battery of 2-4 kwh, Rs. 50,000-100,000 for three-wheelers (5-10 kwh) and Rs 1.5-2.5 lakh for four-wheelers (15-25 kwh battery).

The move is part of the government’s twin strategies to promote manufacturing as well as sales of EVs in India to create enough size and scale for the industry as the government aims to ensure EVs account for 15% of total vehicle sales in the country.

According to Niti Aayog’s statement, “The incentivisation mechanism under FAME would bring upfront price parity between internal combustion engine and electric vehicles and since the operating cost of EV is considerably lower than ICE, the ecosystem is bound to flourish at an unprecedented rate.”

It is estimated that EVs cost two to two-and-a-half times more than comparable conventional vehicles. However, EVs offer a significant advantage on operating cost (running plus maintenance cost) which could be as low as one-fourth of that of a conventional vehicle. Data from the Society of the Manufacturers of Electric Vehicles shows total electric vehicle sales in India in 2017-18 stood at 56,000 units, up from 25,000 units in the previous year.

Of these, 54,800 were two-wheelers while the number of electric two-wheelers in the previous fiscal was 23,000. However, the number of electric four-wheelers fell to about 1,200 units in 2017-18 from about 2,000 units sold in the preceding year. The government has sanctioned Rs 10,000 crore for three years beginning April 1 for the scheme. The idea is to incentivise purchasers of more than 1.5 million vehicles.

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