EV manufacturers no longer need to be subsidised by govt: Nitin Gadkari

Subsidies on EVs: Union minister Nitin Gadkari on Thursday said that there is no need to provide subsidies for electric vehicles (EVs) by the government in the market. As consumers are on their own now choosing either EVs or CNG vehicles, the minister highlighted that EVs don’t require any more subsidies.

Addressing the BNEF Summit, Gadkari said that the initial costs required in the manufacturing of electric vehicles were very high. As demand has increased among consumers, the cost of production of EV cars has dropped resulting the further subsidies unnecessary.

"Consumers are now choosing electric and compressed natural gas (CNG) vehicles on their own and I do not think we need to provide much subsidy for electric vehicles," Nitin Gadkari said.

The minister has also pointed out that the GST imposed on electric vehicles is lower than the GST imposed on petrol and diesel vehicles.

"In my opinion, manufacturing of electric vehicles no longer needs to be subsidised by the government. The ask for subsidies isn't justified anymore," Gadkari said.

At present, there is a 28 per cent GST  which is levied on vehicles powered by internal combustion engines (ICE), which includes hybrids, and electric vehicles have a 5 per cent GST.

On Wednesday, Union Heavy Industries Minister H D Kumaraswamy also said the Modi 3.0 government is expected to finalise the third phase of its electric mobility adoption scheme FAME in a month or two.

He stated that an inter-ministerial group is currently working on the inputs that were received for the scheme, and efforts are being made to address the issues that were faced in the first two phases of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme (FAME).

The upcoming FAME-III scheme will be replacing the temporary Electric Mobility Promotion Scheme (EMPS) 2024. The EMPS scheme is set to expire in September 2024. 
 

(with PTI inputs)