Indian Government Plans Rs. 14,000 Crore Subsidy For Hybrid, Electric Cars

In Europe, a steady market of Hybrid/ electric vehicles has been established. Almost every major automobile brand is bringing out cars that can run on hybrid powertrain. Unfortunately in India, this segment is yet to find a foothold. The Indian customers always look for efficient, cost effective cars and also pollution level is also quite high here. With proper effort, India can become a good hybrid/electric market.  Recently the Indian government has been working on a scheme that may prove to be a game changer for electric and hybrid car manufacturers. The Rs.14000 crores scheme proposes to give subsidy on the purchase of such eco-friendly vehicles.  The ministry for heavy industries has sent the proposal to the finance ministry for clearance. If it is cleared, there will be a reduction in the prices for electric and hybrid vehicles and it will encourage more Indian customers to opt for clean energy.

As per the new proposal, to pure electric vehicles should get a maximum subsidy of 35 percent while plug-in hybrid vehicles would get benefit of 25 percent. Similarly mild hybrids will be able to enjoy a subsidy of 15 percent. Currently, the electric- hybrid market has very limited appeal in India because of very high pricing of such vehicles and the lack of charging facilities and other related infrastructure. If the proposal goes through, a car like the Toyota Camry Hybrid will get a subsidy of Rs. 1 lakh, on its Rs. 33 lakhs (ex-showroom, Delhi) price. The Mahidra Scorpio e2o could easily see a good subsidy of more than 1 lakh on the price of Rs. 5.99 lakhs (with batteries), making the pricing very competitive.

While the subsidy scheme will cost Rs. 14,000 crores till the year 2020, the savings on fossil fuel would be enormous at Rs. 60,000 crores. Several countries like China, the UK, Germany and also some states of America and Canada have started giving subsidies and tax benefits to promote such vehicles. The Government is expected to take a decision in 2-3 months on the matter.

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