09 Jul 2019
India is looking to encourage its residents to opt for electric vehicles by offering the public incentives during last week’s presentation of the budget.
The budget, presented by Finance Minister Nirmala Sitharaman, showed the government’s plans to promote the use of electric vehicles. The Indian government is set to reduce 150,000 rupees from the income tax on the interest paid for loans that were taken in order to buy an electric vehicle.
Associate director of automotive forecasting at IHS Markit, Puneet Gupta said, ‘The government is trying to create demand, to spur demand, and thus help [original equipment manufacturers].’ Gupta added on explaining how Indian car manufacturers feel discouraged to produce more electric vehicles as they are not often sought after. He said, ‘I think the first thing is to kickstart the demand because, right now, if you see, we’re selling less than 2,000 electric vehicles in a year, which is almost negligible…You’re not targeting the mass, you’re still targeting a limited population.’
Prices for electric vehicles in India are about 1.3 million rupees and Gupta says that tax on them has been reduced to 5%.
One reason for the incentives on electric vehicles is the rising problem of pollution, especially in major cities. Another is so that India would not depend on oil as much as it is. Keeping in mind the rest of the infrastructure that must be built, Gupta said ‘We’re not talking about 20%, 30%, 50% electric vehicle market. Here, we’re just talking about [starting] the electric vehicle marketshare.’