Minister of Road Transport and Highways Nitin Gadkari today explained that he was not against giving subsidies or incentives for electric vehicles, and that his recent statement on the subject was based on his belief that EVs will achieve price parity with internal combustion engine models in the near future.
“I am not against any incentives. The heavy industries minister is responsible for it,” Gadkari said while speaking at the ACMA annual session. Last week, the minister had said that he feels the electric vehicle industry no longer needs subsidies as the tax difference between ICE vehicles and electric vehicles already gives a big advantage for the industry.
Gadkari today said: “The argument from my side is that at the time of electric vehicle launch, the price of lithium battery was $150. Now it is around $110-108.”
“The volume is also increasing. So the basis of my assessment was that without a subsidy, companies can maintain that cost because the cost of production is less. Within two years, the cost of ICE vehicles and electric vehicles will be the same. They won’t need subsidies because they are already saving on fuel. That was my argument.”
Electric vehicle adoption in India is still in the single digits, driven mostly by two three-wheelers, and the government has set a target of around 30% by the end of the decade. The FAME scheme has been instrumental in driving the early-stage adoption of electric vehicles by providing demand incentives.
Currently, the government has been providing subsidies for the purchase of electric two-wheelers and three-wheelers through the temporary Electric Mobility Promotion Scheme (EMPS), which is set to expire in September end. Today, the Heavy Industries Minister HD Kumaraswamy said the government will continue to provide subsidies, and that the EMPS will be extended beyond till the launch of the third leg of FAME scheme.