No More Subsidy for Private Electric Cars

The Centre now plans to discard the cash incentives, which are offered to the buyers of electric cars currently. However, just a few months back, these clean fuel technologies were incentivized. Experts commented that this move would further discourage the sales of private electric cars.

Policy-makers supported the move by saying that the shared-mobility operators like Uber and Ola will get the cash subsidies for their electric vehicles as per the government’s decision.

The reason behind this is as these vehicles will run much more than private cars in the coming time.

According to the official sources, the government tries to eliminate the car incentives because it does not make any substantial difference in improving the sales of these vehicles and also it does not serve the purpose of a clean environment.

As a part of its clean-energy programme, FAME, i.e., faster adoption and manufacturing of hybrid and electric vehicles, the government provides a discount of around INR 1.3 lakhs on an electric car. However, in the new FAME Phase 2 draft policy, which is carried up the heavy industries ministry, the proposal discount is being suggested to be removed.

Earlier, the inaugural FAME scheme had offered a budget of under INR 1,000 crores, but the ministry has proposed to advance it to INR 9,000 crores in the second phase. An official asked that how much are the private cars driven? And he said that the real utility of electric vehicles is on public transport.

However, the government is of the viewpoint that the addition of cab aggregators like Uber and Ola to the list of subsidy beneficiaries would encourage these cab companies to opt for electric cars, which offer high running costs as compared to the CNG alternatives or conventional diesel/petrol (except for the high acquisition cost). Another source said that the maximum benefit for the maximum number of people would be only through public transport.

However, the position runs clashing to the government’s broader mobility vision that was projected a few months back. The government has stated that by the year 2030, he wants the entire car industry in India to get switched to electric cars. The reason behind this is the rising pollution across many cities and the uncontrollable smog and poisonous gases. According to the sales of last year, around only 1500 electric passenger vehicles were sold against diesel, petro, and CNG car sales, which was around 32 lakh.

This 2030 change was driven by Former Power Minister and now in-charge of Railways and Finance- Piyush Goel. He also found a strong resonance with Nitin Gadkari, the road transport, and highways minister. Last year, in September, Gadkari said that he would bulldoze irrespective of the thing that anybody will like it or not, he will do it. He will teach the lesson to the makers of petrol and diesel engine.

There had been a disagreement with the government’s deadline for the e-switch by the car companies and their lobby platform Siam. The companies have been asking for more easier transition instead. Whereas, it has been reported by some official sources that government will continue to provide incentives on the purchase of two-wheelers and electric buses. Moreover, the incentives for buses will be brought down. This will come down to 40% from 60% now; as the current incentives on electric buses meet 60% of the cost of the vehicle.

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