Going Electric: On Plans To Switch To Electric Vehicles

By moderator July 10, 2019 16:14

With a host of incentives unveiled in the Union budget for electric vehicles, India has joined governments in China and Europe that have backed the development of the nascent EV industry by offering extensive fiscal incentives and a favorable regulatory environment.

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  • It is inevitable because poor air quality and noise pollution have sharply affected the quality of life, and pose a serious public health challenge.
  • The budgetary measures will have an immediate impact on the pricing of electric vehicles and bring in more models, but it will take a sustained effort by the Centre, in partnership with State governments, to enable a fast rollout of charging infrastructure.

o    With price competition, a speedy spread of electric two-wheelers can be expected, given that over 80% of conventional vehicles sold in India come under that category.

Government initiative to boost EVs

  1. Tax incentive
  • An additional income tax deduction of ₹1.5 lakh is now offered on interest paid on loans to purchase electric vehicles
  • GST Council has been moved to cut the tax on e-vehicles to 5% from 12%.

o    This aims to narrow the price gap between EVs and internal combustion engine-powered vehicle

o    Both demands were made by the industry earlier.

  • Import duty on spare parts for exclusive use in EVs to be removed
  1. Faster Adoption and Manufacturing (of Hybrid and) Electric Vehicles (FAME) plan: There is a significant outlay under the second iteration of the Faster Adoption and Manufacturing (of Hybrid and) Electric Vehicles (FAME) plan of ₹10,000 crore, to give a fillip to commercial vehicles and to set up charging stations.
  2. Public charging station: The Ministry of Power issued guidelines and standards, setting technical parameters for public charging stations that can enable normal and fast charging.
  3. Customs duty exemption on lithium-ion cells: In 2019 Budget, Government announced customs duty exemption on lithium-ion cells, which will help lower the cost of lithium-ion batteries in India as they are not produced locally.

Public charging station

  • Affordable charging will make these vehicles and commercial three-wheelers attractive because operating costs are a fraction of petrol and diesel equivalents.
  • Longer range travel will require more than a charge-at-home facility, and this would have to be in the form of fast charging at parking lots, retrofitted fuel outlets, new public charging stations, hotels, offices and so on.


  • The Society of Indian Automobile Manufacturers said the industry welcomed the move to promote EVs but was disappointed that an incentive scheme to scrap older polluting vehicles did not find any mention in the Budget.

    Although to expand the use of EVs, a longer-term policy priority has to be the setting up of lithium battery production and solar charging infrastructure of a scale that matches the ambition.

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By moderator July 10, 2019 16:14