A uniform incentive of Rs 10,000/kWh of battery pack capacity would be extended to all electric vehicles, including hybrids
To promote green mobility and curb oil imports, the government plans to incentivise hybrid vehicles along with electric vehicles
The heavy industry department has prepared a proposal to extend incentives under phase II of the Faster Adoption and Manufacturing of hybrid and Electric Vehicles (FAME) India, a senior government official told ET.
A uniform incentive of Rs 10,000 per kilowatt hour (kWh) of battery pack capacity would be extended to all electric vehicles including plug-in hybrids (PHEVs) and strong hybrids, the official said.
“It is estimated that the remaining extra cost of electric vehicles compared to equivalent ICE vehicles would be recovered in under three years by way of operational savings,” the person told the daily.
Hybrid vehicles under highest tax slab
It is to be noted here that subsidies on hybrid vehicles were withdrawn in 2017, placing such vehicles under the highest tax slab of 28 per cent under GST. An additional cess of 15 per cent is applied on electric vehicles, making the total levy to 43 per cent. Whereas, electric vehicles were taxed much lower at 12 per cent to encourage car manufacturers to go all-electric by 2030.
Since then, Japanese auto majors Suzuki, Toyota and Honda have been asking the government to promote hybrid and alternate fuel vehicles till the vehicles can become fully electric.
However, homegrown auto makers Mahindra & Mahindra (M&M) and Tata Motors had opposed the move and advocated transitioning directly to all electric vehicles.
As per the proposed policy, incentive of Rs 20,000 per KWh will be additionally determined for electric buses so that the difference in cost with ICE buses could be recovered in a period of six years by way of operational savings, said the official.
The amount of incentives proposed for buses may be subject to competitive bidding among the original manufacturers, the report added.
