Local and global auto makers with presence in the India market have started responding – slowly, but surely – to the Narendra Modi-led central government’s clear intent of promoting electric vehicles.
Earlier, Maruti’s parent, Suzuki, had announced in April a plan to set up a Rs 1,151-crore lithium ion battery manufacturing unit in Gujarat, along with Toshiba and Denso. These batteries are used in electric vehicles. Now, Honda is also reportedly considering a lithium ion battery unit in the country. Suzuki and Toyota last month said the two global auto majors would work together to introduce electric cars in India by 2020. American car maker Ford tied up with M&M to work together on electric mobility, among other areas of cooperation. Tata Motors and M&M in October won a government tender to supply 10,000 electric cars.
The Indian government has talked about moving to completely to sale of electric vehicles by 2030, though a formal policy to this effect is still in the works. The intent turned clearer when the Goods and Services Tax (GST) Council decided to tax all electric vehicles at a lower rate of 12 per cent when compared with a minimum of 29 per cent charged on small petrol cars and other vehicles. For prices of cars, most which cost Rs 3 lakh to Rs 7 lakh, this tax rate difference is significant. It is a different story, however, that electric car prices are 60-70 per cent more than conventional fuel cars, thanks to the high cost of lithium ion batteries. The industry now wants this GST to be further brought down to 5 per cent.
Business Standard takes a quick look at what various top automobile manufacturers are doing on the front of electric vehicles: