Government chalking out a pro-electric and hybrid cars subsidy

Tuesday 08 July 2014, 09:15 AM by
In an era when auto makers are offering all electric vehicles or hybrid variants of popular models in most of the preeminent auto markets, Indian automotive market is yet devoid of such vehicles. Only a handful of options are available for sale in the domestic market which includes Mahindra Reva e20 and Toyota Camry hybrid. BMW’s upcoming 7 Series ActriveHybrid variant slated to launch on July 23rd, 2014 will also join the aforementioned vehicles.
Government chalking out a pro-electric and hybrid cars subsidy |
Mahindra Reva e2o
However, it seems that the newly formed Modi government is working way out to encourage sales of electric and hybrid vehicles in India. It has been learnt from sources that Government of India is shaping up a subsidy policy for green vehicles in India, though there is yet no confirmation on the timeline by when it will be approved. Suggestion on the subsidy on green vehicles came from the heavy industry ministry according to which a large subsidy of 35 per cent should be given to all electric vehicles and 25 per cent of subsidy should be levied on plug-in vehicles that can run up to 15 kms at one go. On the other hand, subsidy proposed for hybrid cars ranges between 15 per cent to 25 per cent.
If media reports are to be believed, the subsidy has been calculated on the proportion of the difference between the money spent on fossil fuel used to run a car against that of a green vehicle. Government believes that this subsidy will encourage customers in India to buy green vehicles. The scheme is likely to cost a whopping Rs 14,000 crore until 2020, savings in fossil fuel for a time span of six years has been estimated at Rs 60,000 crore.
Toyota Camry Hybrid
One another significant reason for low sales of electric and hybrid vehicles in India is their high cost. Mahindra Reva e20 that was launched in India last year did not get many takers owing to its hefty price tag. Sales of Toyota Camry also suffered drastically due to it being Rs 5 lakh costlier than the petrol variant.
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