Government plan to give India’s electric vehicle industry a new high

4 September 2014

NEW DELHI: India's low carbon transport industry has received fresh impetus with news of a government plan to deliver US$2.31 billion in incentives to manufacturers of electric vehicles.

The National Electric Mobility Mission Plan 2020 (NEMMP)  which is to be approved by the Expenditure Finance Committee and the Union cabinet, and expected to be undertaken by the Government within the next five months  will furnish INR 140 billion (US$2.31 billion) as subsidies to electric vehicle manufacturers.

According to Indian media the mission aims to drive sales of around 6-7 million electric vehicles, a feat which will eventually lead to fuel savings of 2.2-2.5 million tons, equating to INR 400 billion (US$6.6 billion) by 2020. 

In an effort to provide a major boost to the rise of green cars on the road, NEMMP 2020 envisions an inclusive approach that will bring all vehicle segments (both electric and hybrid) under the ambit of a bold incentive scheme. Proper charging infrastructure, indigenous technology and optimum supply is also expected to be put in place to realize the mission's goals. 

The central government is also planning to offer a 35% disparity cost that will arise from the cost difference between internal combustion engine cars and electric vehicles, according to Indian news agency PTI.

NEMMP came into existence in January 2013 when then Ministry of New and Renewable Energy (MNRE) under the former UPA government, revoked an earlier scheme in which the purchasers of electric cars were offered a subsidy of 20%.

The prior scheme had led to a rapid downswing in the sales of electric vehicles which severely affected the job market. However, the new scheme is likely to generate up to 300,000 jobs.

Explaining the significance of the mission plan, Aditi Dass, Director of Programs, The Climate Group, commented: “The Mission Plan comes as a shot in the arm for the EV industry revolution in India. The withdrawal of subsidy by MNRE in 2012 had left both suppliers and consumers with little optimism, but the announcement of a fresh subsidy under the new plan will lead to an exponential rise in the number of electric vehicles on Indian roads.”

The Climate Group’s Bijli - Clean Energy for All program, which is principally funded by the Dutch Postcode Lottery, is also creating an environment of reduced greenhouse gas emissions through renewable energy technologies and improved infrastructure. Find out more.

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By Shuvait Koul

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