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India Betting Big On Electric Vehicles

In his previous tenure as the minister of Transport, former BJP chief Nitin Gadkari created ripples in the automobile industry when he publically stated that India will switch to all-electric cars by 2030.

At a conference full of industry leaders and media he shocked the world when he uttered these brazen words - "I am going to do this, whether you like it or not. And I am not going to ask you. I will bulldoze it.”

His target for switching from conventional fossil fuel-powered automobile industry to all-electric cars by the end of next decade is more ambitious than those of developed nations like the United Kingdom and France who plans switch to all-electric cars by 2040.

What followed was extreme lobbying from stakeholders and industry, and that coupled with the fear of job losses was perhaps what pushed the minister to retract his deadline. As per revised plans, the government set a target from 100 percent to 30 percent conversion of passenger cars. Now, the government wants only electric three-wheelers and bikes in the country by 2023 and 2025. In FY2018, there were more than 21 million two-wheelers sold and a little short of a million three-wheelers sold in India.

EVs Is Important To Carb Pollution and Oil Imports

This new aggressive stance towards EMV by Narendra Modi government seems to address two major concerns – Pollution and Petroleum imports. Major Indian cities have seen a rise in toxins in the air, a major part of which is caused by petroleum dependent automobiles. 

Also, India imports more than 80 percent of its crude oil demand from other nation which puts a lot of pressure on exchequer each time prices jump. In turn, this also adversely impacts domestic inflation. A switch to electric automobiles will help India cut down carbon emissions as well as cut down its vulnerability to oil supply disruption and lower its import bill.

Modi Sarkar 2.0 Pushes for EMVs

Finance Minister Nirmala Sitharaman in here post-election 2019 budget speech made it clear that Modi government has put in a policy framework to promote eco-friendly mobility vehicles component manufacturing and sales in the country. She hopes to make India an electric vehicle manufacturing hub.

Bihar CM Nitish Kumar Travels in Tata Tigor EV
Bihar CM Nitish Kumar Travels in Tata Tigor EV . (Image credit: EESL/ Twitter)

With this in mind, the minister in her budget speech announced an allocation of Rs 10,000 crore for Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme. Apart from that, she also offered an additional Rs 1.5lakh income tax deduction on loan interest taken for electric vehicles (EV). Also, certain parts for electric vehicles were included in her custom duty exempted list during her budget speech.

Following her guidelines, the GST Council also decided to promote electrical vehicles (EVs) by reducing the tax from 12 percent to 5 percent. Ultimately, the government wants to popularise India as EV manufacturing hub.

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Lack of Infrastructure Is Still A Challenge

Despite a diluted targeted India has an uphill task at hand as there is hardly any infrastructure in place today. In a country as large as India, setting up electric charging stations won't be an easy task.

For starters, the government had put out a road map for setting up charging stations for EVs across the country with a target to set up a fuelling point every 25 km.

The government has already pushed plans to install charging stations at offices, mall and public buildings in action. Bharat Heavy Electricals and Energy Efficiency Services have been assigned responsibilities to complete these projects.

Indian authorities are also working on a plan to develop multiple Tesla-style Giga factories to manufacture batteries for EVs by 2025. The investment is estimated to be close to $4 billion.

Industry Tentatively Backs Govt.

The private sector isn't ready to miss out on this big opportunity.  Brands and investors are willing to shell out big bucks to get advantageous early access. Japanese electronics giant Panasonic is one such frontrunner who has committed to installing one lakh charging stations and telematics solutions for electric vehicles in India's top 25 cities by 2024 with the capacity to refuel over a million vehicles.

It is worth pointing out that Panasonic is also one of the key battery cell suppliers for Tesla - the popular American electric vehicles maker.

Hyundai Kona India price starts from Rs 25lakhs

Carmakers themselves aren't far behind as they have started lining up  EV launches in India. Hyundai, earlier this month, launched its Kona electric car in India while Nissan is likely to introduce its Leaf electric cars in India very soon. Indian automobile giants Mahindra & Mahindra and Tata Motors are also planning to launch their electric cars in the domestic market very soon. Tesla too is rumored to debut in India by 2020.

The government is showing strong intent with its plans to push India towards electric vehicles and if the government continues with the same determination, India could possibly shape up to become the top EV manufacturing hub, lending the economy a massive advantage in the years to come.

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