The government has earmarked Rs 9,400 crore for promoting the zero emission pure electric mobility. The taxi or bus operators who will buy electric vehicles will receive cash incentive up to Rs 2.5 lakh for the vehicles that will cost up to Rs 15 lakh.
On the other hand, the electric two-wheeler buyers will receive cash incentive of around Rs 30,000 for the model that cost up to Rs 1.5 lakh. These cash incentives will come when the customers will scrap their old conventional fuel powered vehicle and buy new eco-friendly vehicles.
The government hopes to see boost in sales of the electric vehicle with this new cash incentive package. Not only the commercial vehicle aggregators, personal vehicle buyers too will receive the cash incentive if they scrap their pre-BS III vehicles and opt for electric or hybrid vehicles. The cash incentive package for the passenger vehicle and two-wheelers will claim round Rs 1,500 crore over the next five years.
On the other hand, the government is also emphasizing on developing the charging infrastructure for the electric vehicles across states. Around Rs 1,000 crore will be spent for setting up electric vehicle charging stations across the country.
According to the proposed plan, the plan is to set up at least one charging station in every nine square kilometer. The busiest and major highways will get charging stations in every 25 kilometre. So far, the wide network of charging stations planned to be set up across the country is expected to majorly resolve the hurdle for the development of electric mobility in India.
Other than cash incentives and infrastructure, the GST rates for electric car batteries are also set to reduce. This move will directly cause a drop in prices of electric vehicles. According to the latest proposal by the government, GST rates for the batteries are set to reduce from the current 28 per cent to 12 per cent.
Batteries are among one of the most expensive parts of an electric car. With more car manufacturers around the world slowly moving towards EVs, the government has also started taking actions towards this change.
Currently, Mahindra and Mahindra is the only company making electric cars in India, but many more manufacturers are expected to join the fray. The drop in GST rates will help bring down the manufacturing costs of the cars in India. This will also help boost manufacturing and assembly process of electric cars in India.
Apart from this, the concept of swappable battery packs could also see a major boost. Batteries for electric cars are still imported from countries like China and United States. However, the prices of imported electric cars into India will remain unaffected.
Electric car batteries are calculated in ‘$ per kWh’. In 2010, the cost of batteries per kWh was priced at US $1000 (Rs 67,392*) but since then has reduced considerably. Currently, the cost per kWh for electric car batteries is priced at $225 to $250 (Rs 15,163 to 16,848*).According to a study done by Bloomberg, this is said to further reduce to $100 (Rs 6,739*) by 2026