Government to go easy on push to shift to electric vehicles

Even as the Indian automobile industry is battling the current slowdown, it has been deeply worried about the future of the industry due to the overwhelming tilt in the government’s policies and pronouncements on electric vehicles. The government has now stepped in to assure the industry that its moves will not seriously impact the petrol and diesel vehicles that the country’s auto sector has invested in.

The Minister for Transport, Nitin Gadkari and the Commerce Minister Piyush Goyal have issued statements to the effect that it won’t set any deadline for the stopping the manufacture of petrol and diesel vehicles. If at all, there are some targets set for the replacement in certain sectors, where the new vehicles need to be run on electric power instead of fossil fuels. These may include the vehicles that the government’s own departments will be buying in the coming years. The other area the government is looking at is the taxis whether run as private taxis or as part of the ride-share app-based ones. Here too, the targets set are for gradual replacement and not of a sudden nature.

Niti Aayog had recently recommended that all two wheelers with two-stroke engines be banned from 2023 and all scooters below 150cc by 2025. These, if implemented, can have far reaching consequences for the two-wheeler manufacturing units since they may have to completely review their entire business strategy.

As it is, the automobile industry has been hoping for some kind of relief from the government after the Finance Minister held a series of meetings recently to finds ways to revive the economy and arrest the slowdown.            

The government’s objective in turning to the electric vehicles, whether two-wheelers or four-wheelers is two-fold. One is to reduce the pollution levels in India’s major cities and the other is to cut down on the oil import bill that is a huge drain on the foreign exchange reserves.

The FM announced certain concession in her maiden budget speech and later the GST council cut the tax on EVs from 12% to 5%.

Meanwhile the month of July was no different from the previous ones in terms of lower sales etc.