Sales of Reva electric car went down by 50 per cent as the government’s subsidies for the car lapsed. Earlier, a major subsidy scheme was announced for this car by the Ministry of New and Renewable Energy, which has ended before the new policy administered by National Council of Electric Mobility came into effect. Under the previous scheme, Rs. 1 lac or 20 per cent discount in factory price was offered on the model, thereby making the indigenous Electric Vehicle (EV) cheaper by Rs. 73,000 to 93,000.
Mahindra & Mahindra, which has acquired a majority stake of the Reva Electric Car Company, now sells the EV with a price tag raging between Rs. 4 lacs and Rs. 4.87 lacs. This new price was put into place after the government subsidy was phased out on March 31st. The rise in prices will reduce the sales of this car and affect Mahindra & Mahindra, which rolls out only 470 units of the model per year. In this project, the leading Sports Utility Vehicle manufacturer of India has invested more than Rs. 100 crores and increased its share from 55.2 per cent to 64.26 per cent.
Pawan Goenka, President, Automotive and Farm Equipment Sectors, Mahindra & Mahindra, commented, "The withdrawal of this subsidy has been a setback. We were expecting it to continue."
At present, the company has 2 different outlets for the electric car. Mahindra is also developing a new facility for the upcoming NXR version of the EV. As per reports, the new plant will have the capacity to produce up to 30000 units annually. The Reva NXR has already been showcased at the New Delhi Auto Expo 2012.
A two door electric hatchback car, the new Mahindra Reva NXR is powered by Lithium Ion batteries, which will enable it to run 160 km on single charge. The top speed attained by this car is around 104 km per hour. After its launch, the electric car will compete with the Nissan’s electric car ‘Leaf’. Details of the pricing of Reva NXR have not been disclosed by the company yet. It is expected that the car will carry a price of around Rs. 4 lacs. However, the cost as well as the success of Mahindra Reva NXR will depend greatly on the new subsidy scheme of the government.
The new subsidy policy for Reva drafted by National Council of Electric Mobility is focussing not only on giving incentives to consumers but also on the developing the requisite infrastructure in the country. It will be put into place keeping in mind the fuel dependency of India in order to provide a feasible, affordable and eco-friendly means of transportation to car buyers.
According to Vishnu Mathur, General Secretary, Society of Indian Automobile Manufacturers (SIAM), "The new policy which is a complete mission should not be linked to the just withdrawn scheme."
On the new policy, Goenka stated, "The new policy to be announced soon will give a fillip to electric vehicle sales. The commercial success of NXR will depend on it."
The founder of Reva Electric Car Company and currently the Chief Technical Officer of the Reva project at M&M, Chetan Maini, commented, "There is an uncertainty being created in the market and it's impacting sales. We are in discussion to continue with the old policy till the new one is introduced." He further stated, "Sales of electric vehicles are driven by strong policy."
In all countries, EVs enjoy various incentives and their sales are mainly propelled by considerable government support. The assistance of Original Equipment Manufacturers (OEMs) to set up the needed infrastructure for such electric cars as well as hybrid cars is also instrumental in their success.