The Indian government will offer a subsidy upto to Rs 2.5 lakh for 60,000 electric cars. Government is expected to double the subsidy from Rs. 5500 crore to Rs 10,000 crore. This subsidy will promote the use of electric vehicles in the country.
Sources close to TOI told the funds from this package will be contributed to various segments of the market. Its beneficiaries will be two-wheelers, three-wheelers, buses, and even electric e-rickshaws. The government wants public transportation system to benefit from these subsidies.
The government has also reduced import duties for components required by EVs. With a positive change in the policy, more international brands will bring electric and hybrid vehicles in India. We would definitely love to see a Tesla, specifically the Model 3, which is the best selling Electric Car in the world, at our shores soon.
The subsidy will be offered according to the battery capacity, so a prospective buyer of Mahindra E-Verito would be eligible for a subsidy of around Rs 1.5 lakh, while a buyer of two-wheeler could get around Rs 40,000. Electric buses will benefit most from this move, buses are eligible for a maximum subsidy of 60 lakh.
The government could take up this proposal as part of the second phase of Faster Adoption and Manufacturing of (Hybrid & Electric Vehicles) India (FAME) scheme on 28/2/18. For a rapid implementation, the government has already doubled its proposed subsidy from Rs. 5500 crore.
The plan is supposed to effect from April. The subsidy will be calculated by the battery capacity of the vehicles in question. The scheme will offer Rs. 10,000 per KWh for all EVs and Rs 20,000 per KWh for buses.
The subsidy will make electric two-wheelers and three-wheelers a lucrative choice for customers. With the subsidy, these products can match the prices of their conventionally (petrol) powered rivals. "There will also be a huge focus on expanding the charging infrastructure in cities and along highways to meet the demand. Another focus area will be on developing our capacity to produce lithium-ion batteries for vehicles," the source told Times of India.
The scheme will also promote the expansion of charging stations in cities and highways to meet the required demand. These cars are powered by batteries, local battery manufacturing plants can bring down the cost of EVs by a significant margin.