The Indian government has made another move to encourage sales of electric and hybrid vehicles by providing in the next fiscal year subsidies of up to Rs 1.5 lakh (US$2,700) for cars and Rs 50,000 (US$929) for two wheelers, according to government sources.
The move comes ahead of Prime Minister Manmohan Singh's unveiling of the National Mission Plan for Electric and Hybrid vehicles on January 9. The plan had been originally announced in the 2011 budget.
In a subsidy scheme announced in November 2010, the government made available a corpus of Rs 95 crore (US$18 million) to provide up to a 20% incentive on ex-factory prices of vehicles, subject to maximum limits of Rs 4,000 (US$74) for low-speed electric two-wheelers, Rs 5,000 (US$93) for high-speed electric two-wheelers, and Rs1 lakh (US$1,900) for electric cars, provided the vehicles had a minimum of 30% parts made in India. Under the scheme, the benefits would be passed on by the manufacturer to the customers, who would later claim a refund from the government. Electric vehicles sold in India in 2011-2012 totaled around 130,000 units, according to the Society of Manufacturers of Electric Vehicles lobby group.
India is prepared to spend at least Rs 22,500 crore (US$4.2 billion) over the next eight years to promote electric and hybrid vehicles, with the government providing Rs.13,000- 14,000 crore (US$2.4-2.6 billion) in subsidies. The remaining amount will be invested by the auto industry in research and development to reduce dependence on fossil fuels.
A government announcement previously released says that India hopes to have seven million electric vehicles on the road by 2020. In the next fiscal year, the government expects sales of electric two-wheelers to increase to 120,000 units and cars to 12,000 units. (January 4, 2013)