Union Minister Nitin Gadkari Announces Subsidies No Longer Need in EV Industry
Union Minister Nitin Gadkari announces subsidies are no longer necessary in the EV industry, in light of consumers purchasing either compressed natural gas (CNG) or electric cars.
At the Bloomberg New Energy Finance (BNEF) Summit, Gadkari shed light on the production costs of electric vehicles being high initially.
But have now decreased due to rising demand that have sparked the need for additional financial incentives.
"Consumers are now opting for electric and CNG vehicles of their own accord, and I believe substantial subsidies for electric vehicles are no longer required," the Minister for Road Transport and Highways added.
Other reasons he highlighted was the lower GST rates on electric vehicles compared to those on petrol and diesel vehicles.
"In my view, government subsidies for electric vehicle production are no longer justified," Gadkari said.
Currently, internal combustion engines are subject to a 28 percent tax, whereas electric vehicles are subject to a five GST.
"My intention has always been to encourage Indian automobile companies to focus on manufacturing cleaner vehicles like EVs, not to make operations difficult," he stated.
To overcome obstacles encountered in the first two stages of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) scheme, he stated that an interministerial panel is examining program inputs.
The Electric Mobility Promotion Scheme (EMPS) 2024 will be replaced by FAME 3, when it expires in September.
In closing, Gadkari reiterated his resolve to push greener cars in the Indian market.
"My intention has always been to encourage Indian automobile companies to focus on manufacturing cleaner vehicles like EVs, not to make operations difficult," he stated.