The electric vehicle industry was in talks a few weeks back when there were plans to introduce subsidies on these vehicles to generate the demand. In the next few months, the Government would also be launching its ‘National Mission for Electric Mobility’. So much focus and attention has been given to this segment in the past few months. One reason was definitely the fuel price hikes. Electric vehicles are potential future vehicles which can help the country to reduce the dependency on the fossil fuels, at the same time also reducing the cost incurred on buying these fuels.
With all this in mind, the Government has now decided to involve itself deeply into the electric vehicle project. A new xEV eco-system will be build by the auto industry and the government has decided to fund 60 percent of the project cost which stands at Rs. 23,000 crore. This means that the Government would help the industry with a whooping Rs. 13,800 crore for this project. The rest of the amount would obviously be borne by the auto industry. The framework has been granted an ‘in-principle approval’ already.
The industry would invest in the manufacturing process where as the tie-up with the Government is for the research and development purposes. This investment looks at targeting manufacturing of 6-million electric two- and four-wheelers by 2020. To boost up the demand, subsidies will stay on lines for almost 7 to 8 years. Support from the Government can help local production too. For example, the lithium-ion batteries are imported currently. If the local suppliers starts manufacturing these batteries, then the cost can be significantly reduced. The project would also include setting up of charging stations across major cities.
Source – Business Line