Electric cars are coming to India. Photo: iStock
Electric cars are coming to India. Photo: iStock

The Indian government has stepped up its efforts to ensure faster adoption of electric vehicles in the country.

Heavy Industries Minister Mahendra Nath Pandey has said the government is working on establishing charging infrastructure across the country so that it encourages more people to buy electric vehicles. He said various ministries and government departments are collaborating to set up charging stations on highways and in cities.

At the annual convention of the Society of Indian Automobile Manufacturers, Pandey said, “We are working in a way so that the EVs become a public movement. That’s how we are going ahead with this.”

The minister said the government has come out with a 1.5 trillion rupees production-linked incentive scheme to encourage auto firms to build more electric vehicles. He said that under the Atmanirbhar Mission, India also wants to export good-quality products to international markets.

In order to encourage the adoption of electric vehicles, the Ministry of Road Transport and Highways had recently issued a notification to exempt battery-operated vehicles from the payment of fees for issue or renewal of registration certificates. Owners of these vehicles also need not pay for the assignment of new registration marks.

The goods and services tax on electric vehicles has been reduced to 5% from 12%, while the tax on chargers/charging stations for electric vehicles has been slashed to 5%, from 18%.

Electric vehicle sales in India have been rising steadily for the past three years. In the year 2017-18, 69,012 units of electric vehicles were sold in the country and this rose to 143,358 units in 2018-19 and 167,041 units in 2019-20. E-scooters represented an overwhelming proportion of electric vehicle sales. Because they are used for short-haul rides, the riders need not fear getting stranded due to lack of charging stations.

However, experts say that in five years there will be greater adoption of electric vehicles once the charging infrastructure gets strengthened. The market share of e-scooters among two-wheelers will rise to 10% in five years from the current 1%. Electric four-wheelers, which now constitute only 0.2% of total sales, will also grow to 4% by FY26.

India currently has only 1,800 electric vehicle charging stations and under its Fame II program, the total project pipeline is 4,180 charging stations. However, even this is a modest number when compared with 77,000 fuel stations across the country for internal combustion engine vehicles.

Among automakers, the reaction is mixed. While Tata Motors is bullish about electric mobility, the country’s largest carmaker Maruti Suzuki is cautious. Tata Sons Chairman N Chandrasekaran recently said, “We have a very ambitious goal for electric vehicles. From the current 2%, we have planned to have at least 25% of our sales coming from EVs in the medium to long term. We will be launching at least 10 models before 2025. Towards this, we will also do a capital raise for EV segment alone at the appropriate time.”

But Maruti Suzuki Chairman R C Bhargava has told shareholders that the company is looking at the electric vehicle space but will enter it only when it becomes feasible for customers in terms of affordability and for the company to operate without making a loss.