Crucial for achieving environmental goals, use of electric and hybrid vehicles is still go gain popularity in India. Owing to multiple factors, the environmental friendly vehicle industry continues to remain in a bleak state. However, the manufactures, have high hopes from the government to announce revolutionary reforms in the forthcoming union budged to make its target to have 6 million EVs on roads by 2020 looks achievable.
OEMs also expect the government to imply lower taxes on hybrids, mild-hybrids and electric vehicles. Under the Faster Adoption and Manufacturing of Hybrid and Electric (FAME) scheme of the central government, quite a few companies have come forward to introduce their range of hybrid and electric vehicles. The industry still expects greater benefits for the segment to grow in India.
Sohinder Gill, director corporate affairs, Society of Manufacturers of Electric Vehicles (SMEV), said “The forthcoming budget is expected to create a favourable and stable policy environment to achieve India’s electric vehicle target and revive industry with a long-term extension in the FAME policy (ending this financial year).”
Gill added that the industry is currently moving at a snail’s pace and is far from the target of 6-7 million electric/hybrid vehicles in India by the year 2020 as in the National Electric Mobility Mission Plan 2020.
“It will gather the desired momentum with support from the government, in the form of subsidies, tax incentives and infrastructure development,” Gill said.
Kapil Shelke, Founder & Director, Tork Motors said, we expect the government to continue and extend the duration of the already existing incentive under their FAME scheme launched in 2015, offering subsidies on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars.
Shelke added that there is a need to cut import duties on lithium ion batteries and other parts apart from other forms of taxes which contribute nearly 20-70 per cent of the overall cost of the product.
“Considerable reduction in import duty can enable EV players to offer products at a competitive price point to the consumer,” Shelke said, adding that a waive of on income tax on company for the first three years of business can go a long way in fostering growth and encouraging other players to join the bandwagon.
Tom von Bonsdorff, managing director, Volvo Auto India said, “India requires critical thinking about environmental pollution and should be receptive of new technologies adopted by automobile industry. There is a need to revisit the existing import duty structure for hybrid vehicles. We are expecting that the Union Budget 2017 will introduce more incentives or schemes like Faster Adoption and Manufacturing of Hybrid and Electric (FAME) scheme to promote eco-friendly driving and mobility.”
Overall, the upcoming budget may shape the future of the environmental friendly vehicles industry. Many manufacturers also wants government’s support in improving the existing infrastructure to promote EVs. They say that until battery charging points are available in every corner like petrol pumps, people will hesitate to buy their product.
BW Reporters
The author is Senior Correspondent with BW Businessworld
