Govt proposes incentives to boost EV sales in five years
NEW DELHI: The ministry of road transport and highways has formulated a list of non-fiscal incentives to ensure that electric vehicles (EVS) account for 15% of total vehicle sales in the next five years, Union minister for road transport, highways and shipping, Nitin Gadkari, said at the 58th annual convention of the Society of Indian Automobile Manufacturers (Siam).
This would entail a quantum leap in the sales of electric vehicles, which now forms less than 1% of total vehicle sales in the country. The government also plans to establish compressed natural gas (CNG) dispensing stations in 300 districts across the state to further push for the manufacture of vehicles running on clean energy. Gadkari also said that electric and Cng-powered vehicles will be exempt from road permits to promote their usage.
“Electric vehicles attract 12% GST and no further subsidies are needed and we don’t have any intention of subsidizing personal vehicles. The non-fiscal incentives that we will announce will increase sales of electric vehicles to 15% of total sales. There is no need for automobile companies to ask for incentives any more. They should rather develop a pool of drivers to enhance skill development,” said Gadkari.
As electric mobility will take some time to develop in India, in the short term the Union government is focussing on increasing the supply of CNG to push vehicle manufacturers away from the development of vehicles that run on diesel and petrol. This is significant as the availability of CNG has been a major obstacle for increasing sales of such vehicles.
To give sales of CNG vehicles a fillip, the government will establish CNG stations in 300 districts and increase the number of fuel stations to 10,000 from just 1,400 at present, the Union minister for petroleum and natural gas, Dharmendra Pradhan, said at the same event.
Maruti Suzuki India Ltd, the largest carmaker in the country, will be the biggest beneficiary of this decision as the company has several models, including Alto, Wagon R, Celerio, Dzire and Carry, that come fitted with CNG engines. These vehicles account for less than 10% of total vehicles sold by the firm but the announcement by the government has the potential to boost the vehicles sales of Maruti in the long run, especially because of the extensive dealer network the company boasts off in the semi urban and rural markets.