To give a fillip to environment-friendly vehicles, a committee formed by the heavy industries ministry is considering lucrative tax breaks and incentives for automakers to produce and sell electric vehicles. The committee, which would also have representatives from the industry, has been set up to identify the challenges to a viable electric vehicle.
At present, top automakers like Maruti Suzuki, Hyundai Motor and Tata Motors have shied away from introducing electric vehicles citing lack of infrastructure and fiscal incentives for making such large-scale investments. Though industry sources have maintained that these companies have been quietly working behind the scenes to create prototypes of electric vehicles, officially, the original equipment manufacturers (OEMs) have refused to elaborate on their plans.
The cause for electric powered vehicles got a shot in the arm earlier this year with finance minister Pranab Mukherjee?s announcement of setting up of the national mission for hybrid and electric vehicles. Senior executives of car companies said that the mention of such an initiative in the 2011-12 Budget speech augured well for the industry. ?The heavy industries ministry has started work on the plan. At present, the government is hearing various industry bodies,? a source privy to the discussions said.
Maruti Suzuki chairman RC Bhargava had, however, questioned the electric model in an earlier interview to FE. He had said that at the present juncture electric vehicles were unviable for two reasons ? lack of adequate availability of power and electric charging stations. ?Almost 90% of the Indians park their cars on the roadside, where will they charge the cars?? Bhargava had asked.
?While electric cars have a future. They are yet to catch the fancy of Indian carmakers,? an analyst with a global consultancy firm said. According to the analyst, who works with a clutch of OEMs, companies still feel that since car penetration is so low in India, first-time buyers would always opt for a diesel or petrol car as their first purchases.
Last year, utility major Mahindra & Mahindra bought a controlling stake in the Bangalore-based Reva Electric Car Company. Since then the company has been renamed as Mahindra Reva Electric Vehicle Company. M&M hopes to use the company?s superior electronic technology across its slew of products, including two-wheelers.
On Thursday, General Motors launched its much awaited Electric Beat. The car runs on lithium-ion battery and the technology will soon make its way to other countries like South Korea and China.
At present, Delhi government offers subsidy of 15% on the price of the vehicle, including 12.5% exemption on VAT.
