Indian Government's EV plans can expect ample return on investment

Clare Saxon Ghauri
9 December 2011

NEW DELHI: A new report by the Society of Indian Automobile Manufacturers (Siam) says that the Union Government’s plans for 7 million electric vehicles (EVs) on India's roads by 2020 can expect to see a return on investment of between Rs.39,000 crore and Rs.43,000 crore (roughly US $75 million and US $83 million) in the next nine years.

The report, which was drafted by Siam for the Union Government, says that the return on investment will come in the form of savings on fuels and lower emissions.

The way to achieve this is proposed in the report through offering incentives such as:

  • improving infrastructure
  • electricity generation
  • manufacturers collaborating with the Government to develop battery charging infrastructure

The report is part of a national mission plan for adoption of electric and hybrid vehicles that was put forward in the Union budget in a bid to cut fossil fuel dependence.

The study states that this return will be won on the much smaller investment of an estimated Rs.12,500-13,500 crore for demand and supply, and Rs.8,000-9,000 crore on research and development (R&D).

These figures come at a time when the world’s biggest car manufacturers are competing to produce EVs with the widest mass-market appeal. Currently, Nissan Leaf is the biggest-selling EV worldwide.

In India around 100,000 EVs were sold between 2009 and 2010 according to the Society of Manufacturers of Electric Vehicles, and India’s only manufacturer of electric vehicles is Mahindra Reva, cars of which sell from Rs. 3.5 lakh. 

Aditi Dass, Consultant, The Climate Group says: “With more players entering the EV market and with Government offering subsidies and showing a great deal more interest in terms of setting EV targets, the scenario in India is promising for EVs getting mainstreamed on India roads. But what is required immediately is EV specific R&D coupled with strong industry thrust that boosts manufacturers, smoothes the supply chain and irons-out marketing issues. Once that's underway, the Clean Revolution in India's transport sector will accelerate.”  


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