Connect with us

Hi, what are you looking for?

CleanTechnica

Cars

India Considers $2.5 Billion Subsidy For Hybrid, Electric Cars To Save $11 Billion In Fuel Costs

Mahindra & Mahindra E2O

Mahindra & Mahindra E2O | Credit: Mahindra & Mahindra

India’s National Mission on Electric Mobility may finally be getting some much-needed attention from the government even as the 2020 plan under the mission seems quite ambitious.

According to a leading national newspaper, the Indian government is considering a financial incentive scheme worth Rs 14,000 crore ($2.5 billion) for hybrid and electric cars. The subsidy would be proportioned to the difference of the price of a car running on fossil fuel and that of a hybrid or electric car, the newspaper reported citing government sources.

The news report claims that the Ministry of Heavy Industries has floated a proposal to the Ministry of Finance that ‘pure electric’ cars be offered a subsidy of 35%, and plug-in electric cars that can drive at least 15 km on single charge be offered a subsidy of 25%. ‘Mild’ hybrid cars and ‘strong’ hybrid cars would attract a subsidy of 15% and 25% respectively. The news report, however, does not report the government rules on classification of hybrid cars into mild and strong.

The government would deliver the subsidies to the car manufacturers, the benefits of which would be passed on to the end customers. Currently, among hybrid cars Scorpio (manufactured by Mahindra & Mahindra), Prius and Camry (imported by Toyota) are available in India. Mahindra & Mahindra also manufactures the e2o electric car.

Under the 2020 plan of the National Electric Mobility Mission (pdf), the government plans to create a potential demand for 5 to 7 million electric vehicles, including buses, light commercial vehicles, two-wheelers and three-wheelers, as well as electric cars.

The subsidy initiative seems to be a part of government’s 2020 plan to invest up to Rs 23,500 crore ($4.3 billion) by 2020 to promote demand and create a sustainable infrastructure for the electric automotive industry. In 2012, the government announced plans to pump in $2.5 billion by 2020 to spur demand for electric vehicles. The balance of $1.75 billion would be invested by the government and the industry to develop power and charging infrastructure and in research and development.

According to the government, the $2.5 billion subsidy to be offered to the auto industry until 2020 would help the country save about $11 billion on fuel costs. India imports a large amount of auto fuel, and the price of petrol and diesel has been the source of political and economic contention for years now. The government provides billions of dollars in fuel subsidies every year to oil marketing companies that have been selling petrol and diesel at a loss for years.


Appreciate CleanTechnica’s originality? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador — or a patron on Patreon.
 
 
Have a tip for CleanTechnica, want to advertise, or want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Written By

Mridul currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.

Comments

You May Also Like

Climate Change

Now an “extremely severe cyclonic storm,” Tropical Cyclone Tauktae has already killed at least 12 and forced nearly 150,000 people to evacuate along India’s western coast over...

Clean Power

The Indian government has announced a new incentive scheme to boost manufacturing in the solar power sector. Through this scheme, the government plans to...

Clean Power

One of India’s largest renewable energy generation companies, Adani Green Energy, has reported stellar financial performance during the first quarter of this year. According...

Clean Power

One of India’s largest renewable power companies, Tata Power Renewable Energy, has secured the rights to develop a large solar power project. According to...

Copyright © 2021 CleanTechnica. The content produced by this site is for entertainment purposes only. Opinions and comments published on this site may not be sanctioned by and do not necessarily represent the views of CleanTechnica, its owners, sponsors, affiliates, or subsidiaries.