Indian Government Wants EVs To Be 15 Per Cent Of New Sales

At the SIAM annual convention, Nitin Gadkari, Minister for Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation, announced that the government has no intentions to subsidise electric vehicles in India. According to the minister, the current GST rate of 12 per cent is the best the industry is going to get. Currently, conventional cars are charged with a total GST amounting to 43 per cent of the car’s cost. And this rate is on cars that are at the affordable end of the spectrum and are mostly hatchbacks. At the same time, Nitin Gadkari also announced that the government wants 15 per cent of all new cars sold to be EVs.

Currently, there are only two full EVs on sale in India today and both are made by Mahindra: the e2o Plus and e-Verito. The lack of options and high price of EVs hampers customer confidence, which combined with the lack of subsidies doesn’t make the Indian market a conducive environment for electric cars. Carmakers have frequently requested the govt. for subsidies to keep vehicle price in check as EVs are quite expensive to produce and even more expensive to sell. That combined with the common EV problem of range anxiety renders the EVs’ case against conventionally powered cars rather redundant.

For example, the e2o Plus starts at Rs 6.07 lakh, ex-showroom Delhi. That puts it in the same price bracket as hatchbacks such as the Maruti Suzuki Swift, Hyundai Grand i10, Ford Figo and even sedans like the Toyota Etios and Nissan Sunny. While the price is similar, the size of the e2o is much smaller than the aforementioned cars, which fails to make the EV a value for money option in the eyes of the consumer.

Other problems with EVs include range anxiety and charging times, sometimes needing nearly 6 hours to charge the car for 100-120km range. In addition, EV charging infrastructure in India is in its infancy, to say the least.

However, we have been promised that EVs will arrive in India very soon. Toyota and Maruti Suzuki along with Mahindra have promised EVs in the next couple of years, while Hyundai is bringing the Kona EV next year. However, the carmakers have stated that these cars will not be affordable by any measure and will neither be volume players. In addition, luxury carmakers Audi and Mercedes have also said that they are considering EVs for India by 2020. It will, however, be easier for the luxury carmakers to better justify the exuberant price tags.

As things stand today, 15 per cent EV volume in the next five years is an audacious vision, one which is unlikely to be realised. Perhaps, the govt. can instead shift its focus to promoting plug-in hybrids which combine electric mobility with conventional ICE power. It can help people get used to the idea of electric mobility in the city, eliminate range anxiety, and will not be too expensive compared to their conventionally powered vehicles. And since PHEVs do not require charging outside of the consumer’s home, the time can be utilised to prepare infrastructure for the next step: complete electric mobility.