Market scenario

India: Transforming India’s roadmap

| Author / Editor: Ahlam Rais, Associate Editor / Franziska Breunig

The Indian Government has an ambitious plan to sell only electric vehicles by 2030!
The Indian Government has an ambitious plan to sell only electric vehicles by 2030! (Source: Deposit Photos)

Electric vehicles are the latest addition to the country’s business prospects. We bring to you an insight on the latest developments and incentives provided by the Government of India in this booming industry.

The Indian Government has an ambitious plan to sell only electric vehicles (EVs) by 2030! This green move has been undertaken to reduce the country’s carbon emissions in accordance with the Paris agreement. Many consider this move as too ambitious but the implementation work has already begun. The Union minister for road transport Nitin Gadkari recently addressed the Society of Indian Automobile Manufacturers (SIAM), India’s automobile lobby group and said, “We should move towards alternative fuel. I am going to do this, whether you like it or not.”

Background

In 2013, the first vision to produce hybrid and electric cars was undertaken under the National Electric Mobility Mission Plan (NEMMP) 2020 by the Government of India. More recently, in 2015, the government introduced the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME India) under NEMMP 2020. An initial investment of Rs 750 m was also allotted to push this initiative forward. The movement has gained momentum now in the background of the ‘Make in India’ initiative.

Mapping the road ahead

The state of Karnataka aims to become the hub for electric vehicles as it was the first in the country to approve the Electric Vehicle and Energy Storage Policy 2017. But Gujarat seems to have taken the lead. Many players such as Suzuki Motors have recently announced to produce electric cars at its factory in Gujarat for the Indian as well as global market. JSW Energy, a division of the Jindal Group has signed a Memorandum of Understanding (MoU) with the Gujarat Government and will invest nearly Rs 40 m for the establishment of a manufacturing facility that produces electric vehicles and is expected to commence commercial production in 2021.

Reports also suggest that one of the largest manufacturers in the Indian automotive industry, Tata Motors is looking to revamp the sales of its popular ‘Nano’ car by launching its electric version at its factory in Sanand, Gujarat. There is more! Ford Motor Co. has entered into an agreement with Mahindra Group and are looking at potential business opportunities to collaborate and work together to produce electrical cars. Other leading players such as Tesla and Mercedes Benz are also keen to manufacture electric vehicles in India by 2020, provided it receives adequate support from regulatory authorities.

Business incentives

Numerous states in India have also waived various taxes for these vehicles. For instance, states such as Chandigarh, Rajasthan, Uttarakhand and Chhattisgarh do not levy Value Added Tax (VAT) while Tamil Nadu, Maharashtra, Madhya Pradesh, Karnataka, Kerala, Andhra Pradesh, Gujarat and West Bengal offer partial rebate on VAT.

This year, in Nagpur, Maharashtra has also become the country’s first city with an electric fleet of 200 electric vehicles, including taxis, buses, e-rickshaw and autos. A pilot project of 200 electric vehicles was launched. After the launch, Union minister for road transport Nitin Gadkari said, “Electric mass mobility ecosystem in Nagpur will bring about a transformational change in the automotive and transportation landscape in the country.” Adding to this Devendra Fadnavis, Chief Minister of Maharashtra said, “To promote electric fleet, we have waived VAT, road tax, and registration for all electric vehicles in the state, and we look forward to building Maharashtra as a model state for others to emulate in the future.”

The Government of India (GoI) has also recently awarded a Rs 1,120 crore government contract to Tata Motors for supplying 10,000 EVs in the national capital region (NCR)! This strategy is a part of the bigger initiative of placing more than 1 million electric three-wheelers and 10,000 electrically-powered city buses in the region by mid-2019.

The GoI also has plans for electrifying all new vehicles in the country by limiting registration of petrol and diesel cars while giving incentives and subsidies on sales of electric cars. We are curiously waiting to witness how the introduction of these electric vehicles will change the dynamics of the existing automobile market in India. Guess we will have to wait and watch!

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