While capping sales of conventional cars, signaling a dramatic shift in policy in one of the world’s fastest growing auto markets, lowering taxes and interest rates for loans on electric vehicles, have been recommended by India’s most influential government think-tank, reports the news agency Reuters.
Using tax revenues from the sale of petrol and diesel vehicles to set up charging stations for electric vehicles and opening up of a battery plant by the end of 2018 by the government are some of the suggestions made in the draft of the 90-page blueprint which is claimed to have been seen by Reuters.
Government and industry sources reportedly told Reuters that likely to be shaping a new mobility policy, and electrifying all vehicles in the country by 2032 is the aim of the recommendations that have been made a draft report by Niti Aayog, the planning body headed by Prime Minister Narendra Modi.
The current policy of the Indian government incentivises both hybrid vehicles – which combine fossil fuel and electric power – and electric cars, and the report’s focus solely on electric vehicles marks a shift away from this policy. This has caused a concern among some automakers.
“India’s potential to create a new mobility paradigm that is shared, electric and connected could have a significant impact domestically and globally,” said a draft version of the report, titled Transformative Mobility Solutions for India, which will be made public this week.
In order to discourage fossil-fuel cars in big cities, China announced aggressive measures last year to push sales of plug-in vehicles including subsidies, research funding and rules, last year, and India’s plan to leapfrog hybrid technology comes after China’s that announcement.
And as India looks to reduce emissions as part of its commitment to the Paris climate treaty and cut its oil import bill to half by 2030, it would also mark a radical response by the country.
But the blueprint faces challenges, acknowledges officials. Car makers, who have been consulted on the proposals ahead of publication, would hesitate to make the necessary investment in the technology because of the high battery costs would push up car prices and a lack of charging stations and other infrastructure.
“If we accelerate electric vehicle growth it will be a disruption for the auto sector and would require investment, but if we’re not able to adapt quickly we risk being net importers of batteries,” said a government source involved in the plans. “There has been resistance from car makers.”
While Toyota Motor Corp sells its luxury hybrid Camry sedan in the country, investments in so-called mild-hybrid technology, which makes less use of electric power than full hybrids, have been made by India’s top-selling carmaker Maruti Suzuki.
The only manufacturer of electric vehicles in India is Mahindra & Mahindra.
India offered incentives for clean fuel technology cars to boost their sales to up to 7 million vehicles by 2020 under a scheme launched in 2015, called Faster Adoption and Manufacturing of Hybrid and Electric Vehicles.
But with the sales of electric and hybrid cars making up only a fraction of the 3 million passenger vehicles sold in India in 2016, the scheme has made little progress despite incentives as high as 140,000 rupees ($2,175) on some cars.
(Adapted from Reuters)