Union Minister Nitin Gadkari stated that since consumers are already selecting EVs or CNG automobiles on their own, there is no need to give subsidies to manufacturers of electric vehicles. Speaking at the BNEF Summit, Gadkari noted that while producing electric vehicles used to be expensive, as demand grew, production costs decreased and additional subsidies were no longer needed.
“These days, consumers choose their own gas and electric vehicles, thus I do not think there is much need of government support for electric vehicles,” the road transport and highways minister said.
The minister made the point that electric vehicles have a lower GST than petrol and diesel vehicles. “I believe that government subsidies are no longer necessary for the production of electric vehicles. The request for subsidies is no longer required,” he said. Currently, internal combustion engine vehicles (including hybrids) pay 28% GST, whereas electric vehicles pay 5% of the total tax.
Given the magnitude of India’s economy and energy needs, Gadkari stated that the entire transition away from fossil fuels to alternative fuels would be a gradual process, even while he ruled out further levies on petrol and diesel-powered cars. The minister also stated that the price of electric vehicles will decrease if the cost of lithium-ion batteries continues to decline.
