The Society of Manufacturers of Electric Vehicles, the apex industry body representing electric vehicle manufacturers in India has asked the government to levy an additional ‘Green Tax’ on ICE internal combustion (IC) vehicles to incentivise electric vehicle adoption and support reduction of crude oil imports.
The Green tax it says would also rationalise the expected drop in sales of EVs on account of the reduction in subsidies starting this month. It believes that an increase in taxes to the tune of 100 basis points on traditional polluting ICE two-wheelers will be required to fund subsidies for electric two-wheeler vehicles and put the FAME scheme back on track.
It points out that an average petrol two-wheeler emits nearly 300 grams of CO2 per kilometre. An average 30km utilisation per day would translate to lifetime mileage of 70,000km, this translates to CO2 burden from ICE scooters at 9kg of CO2 per vehicle per day. In FY2023 1,58,62,087 two-wheelers were sold in the country, which translates to an emission burden of almost a 142 million kgs of CO2 released in the atmosphere per day – and a mind blowing 333 billion kgs of CO2 – for the life time of the FY23 ICE scooters – which has potential long term health – and financial implications for the country.
As per a NITI Aayog report, electric vehicles are much more efficient since they covert around 60 percent of the electrical energy from the grid to power the wheels, whereas petrol or diesel cars can only convert 17-21 percent of the energy stored in the fuel to the wheels, which the SMEV said indicates a waste of around 80 percent. Additionally, petrol or diesel vehicles emit almost 3 times more carbon dioxide than average electric vehicles.
Sohinder Gill, Director General, SMEV said, “It is time that the EV sector is allowed to compete at par with ICE vehicles. While we are tackling awareness and adoption issues as an industry, the biggest hurdle is the cost of ownership as India is a price sensitive market. Additional Green Taxing of ICE vehicles will not only bring EV and ICE at the same level but also encourage bigger OEMs to enter the EV market with confidence and a long-term outlook, which will benefit the country.”
