Electric Vehicle Sector to Get a Boost

Electric cars have been around for some time on Indian roads, but have not really taken off in a big way. They are much smaller than re cars and lack in some performance parameters. In spite of the shortcomings, electric cars have many advantages. For instance, the government is trying to make these cars popular given that they are more environmentally friendly and that the government has a hefty import bill for oil. Even after the crash in crude prices, the import bill for oil remains high and is one of the big items of foreign exchange expenditure.

The government is now planning a slew of subsidies for both car makers as well as buyers towards the effort to put more electric cars on the roads by the year 2020. The government is looking at having six million electric car owners by that year and is planning a subsidy spend of about Rs. 1400 crores over the next two years. By the year 2020, it is expected that this figure will go up to Rs. 24,000 crores. The government is expected to put up Rs. 14,000 crores of this subsidy and the balance is expected to be directed towards research and development efforts by the auto industry for the development of electric cars.

This scheme is expected to be included in the forthcoming budget 2015. This is expected to give India more solid grounds to stand on in the international climate talks. The government has requested the Ministry of Heavy Industries to look at exploring ways of tracking the expenditure and the subsidies online.

Given the thrust towards renewable energy concerns, this clearly appears to be the way forward. This move will have a spin off effect on the renewable energy sector, giving a boost towards efforts in this direction. The benefits are twofold – energy security and climate benefits.

In 2013, the then Prime Minister Mr. Manmohan Singh had unveiled a rather ambitious scheme – The National Mission Plan for Electric and Hybrid Vehicles. Two years down the line, the scheme remains on paper with little to show for it. Mr. Chetan Maini, the founder and CEO of Mahindra Reva Electric Vehicles Private Limited, wished for early implementation of such schemes, pointing out that it was a strong policy push in China that saw the sale of electric vehicles go up by 500 percent to take the number of vehicles on Chinese roads beyond that on American roads. The same thing happened in Norway and Sweden. Early implementation would also bring in investors into the automobile as well as the energy segment.

The government forecasts that this will save about 2.2 to 2.5 million tonnes of liquid oil, which translates to about fourteen to fifteen thousand crores of rupees. Carbon dioxide emission is expected to decrease by one and a half percent over the next two years and it is also expected that the policy will put about eighty thousand electric vehicles on Indian roads, mainly in the two wheeler and three wheeler segment.

Venkatesh Reddy (have 76 posts in total)

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