Government strives to make EVs affordable

The Government of India is analysing the subsidies that could apply to cost of ownership for electric vehicles (EVs). If all goes well, it could well make an announcement by the beginning of the fiscal year. This comment was made by Ambuj Sharma, additional secretary, Ministry of Heavy Industries & Public Enterprises in reply to a question at the 4th SIAM Diesel Conference held in Mumbai today. He also alluded to the fact that in an election year, one cannot go strictly by deadlines.

 

Based on estimates, Sharma said subsidies could well work out to Rs 12,000 crore over a seven-year period as the number of vehicles that run on electricity go up. He put first-year estimates in the region of Rs 2,000 crore. 

 

The government is working with the Union finance ministry for a tie-up to facilitate more ownership of EVs. The idea behind the government’s plan is to ensure a self-sustaining ecosystem by the year 2020. The government has said that there could be six to seven million EVs, including two-wheelers, on India’s roads by that dateline. Continued..

 

 

So far, in the passenger car segment, Mahindra Reva Electric Vehicles has 400 e2Os on road but due to its high sticker price, there are not too many takers. The electric car was launched last March. The National Mission on Electric Vehicles and Hybrids was announced two years ago but there hasn’t been much visible progress.

 

The government has already approved a pilot project for Delhi that comprises two parts. In the first part, which will be handled by a specially constituted SPV, the target is the corporate sector that currently hires diesel and petrol vehicles; the government wants it to use EVs. In the second part, the government is examining using EVs for last-mile connectivity.

 

Meanwhile, the government is working on its Automotive Mission Plan for the year 2016-26. Sharma admitted that the objectives of AMP 2006-16 had not been met fully but was confident that 75 percent of that target could be met in about two years. Continued..

 

 

The government is also working on a fuel policy, a document of which could be ready in a few months. Speakers at the conference included Dr Tim Leverton, head (advanced and product engineering) Tata Motors; Paul Sowerby, chief technical officer, Cummins India; R Malhotra, director (R&D), Indian Oil Corporation; and Saumitra Chaudhuri, member of the Planning Commission. They spoke about the importance of diesel in the Indian vehicle market, its potential to lower emissions and the need to encourage growth in diesel.

 

While the administered fuel price mechanism was dismantled in 2002, petrol pricing was freed in June 2011. Earlier this year, the government allowed oil marketing companies to increase the price of diesel by 50 paise a month. In recent months, the depreciation of the rupee has added to the recovery burdens of the oil sector.