The Indian government needs to provide tax incentives to buyers of electric vehicles to popularize the segment.
In an interview with PTI, Chairman of Mahindra & Mahindra, Anand Mahindra, said that the government of India needs to incentivize buyers of electric vehicles. He said that customers are holding back from purchasing an electric car because of very high costs of batteries which need to be replaced every five years.
Usually, before the buyer can even recover the amount they have spent on the EV, they are in turn burdened by the cost of battery replacement as the cost of lithium ion batteries is very high. It only makes sense that the government actively starts pushing its electromobility plans by creating incentives like reduction in road taxes, subsidies in insurance to provide a lower price tag for the vehicles.
Mahindra also said that, “It could be by lowering taxes of other kinds, but you do need some incentive to lower the upfront price. This can be transitioned down. Because, what is happening simultaneously is that battery prices are also coming down dramatically,” With battery prices coming down, there would be a break-even between the conventional engine powered car and the electric car at some point in future, he added.
“So all the government needs to have (is) some kind of view on creating incentives that taper down over time. As the visibility of battery prices becomes greater they can start eliminating these subsidies. That is what the government should do,” Mahindra said.
He also added that the government needs to come up with charging infrastructure to deal with range issues. This is not a very farfetched suggestion and can be implemented with minor tweaks. Norway leads Europe in terms of electric vehicle adoption. It started way back in the 1990s to cut pollution. Today, the Scandinavian nation has highest EVs per capita and the total population of the country is just 5.2 million.
While Norway which is ahead of India by 25 years in terms of electric vehicle adoption, it has set 2025 as the year to completely phase out gasoline-powered vehicles. In comparison, India has set itself a target year of 2030 to phase out conventional vehicles. The would need some desperate measures, very soon. RELATED: Electric cars in India: Here’s what needs to change to make it a reality
Currently, Mahindra is the only manufacturer in India that offers electric options to its consumers. It has also committed to the government that it’s ready to raise its production capacity as needed. Currently, it has a capacity of 2,000 units per month and can increase it to 5,000 if the market demands it. ALSO READ: Forget Tesla, here are 6 green cars that you can buy in India right now