New Delhi: The government is weighing proposals to cut taxes on electric cars and amend the electricity act to allow entities other than power distributors set up charging points for the cars, in a bid to popularise them and cut down on pollution.
The GST Council will be asked to consider lowering the taxes on electric and hybrid cars. States will be urged to either waive or lower the road tax for electric cars.
Car makers have already sought a lower tax rate of 12 per cent on electric vehicles, while states such as Goa have waived the road tax on them. At the same time, the power ministry is considering amending the electricity Act to allow private entities purchase power from distributors and set up charging points near fuel outlets.
Officials said Prime Minister Narendra Modi has personally given a signal to the industry and government to move towards electric or alternative energy-powered vehicles from the petrol or diesel ones.
Tata Motors, Mahindra, Tesla, BMW, Nissan and Hyundai are planning launches over the next two years. Sources say that Nissan is working on making a car for Rs 7 lakh.
The Mahindras are expected to showcase two electric vehicles at an upcoming auto-expo including a coupe and a micro SUV, while the Tatas will roll out the Tigor to be backed by a chain of charging stations set up by Tata Power.
The government is studying a draft paper by the Society of Indian Automobile Manufacturers (SIAM) that lays out a road map to shift to electric vehicles by 2047, with the conversion of 40 per cent of cars and all buses by 2030.
However, both SIAM and the analysts said the government needed to do more beyond lowering the taxes on electric or hybrid vehicles to 12 per cent.
There should be subsidies to set up electric charging points, tax exemptions for loans to buy the cars besides minor assistance such as waiving parking fees and road tolls.
The government in 2014 came up with a plan to give subsidies up to Rs 150,000 to electric cars and Rs 30,000 to electric two wheelers, provided at least 30 per cent value addition was done in India.
Auto giants have pointed out it is impossible to start localisation from the very beginning. Besides, hybrids will remain more popular in the medium term and should also qualify for the incentives. These issues are under discussion with the government, industry officials said
Already a number of companies have announced plans to invest in India's electric vehicle programme expecting sops.
JSW Energy has signed an MoU with the Gujarat government to set up an electric vehicle plant at a cost of Rs 4,000 crore, which will have capacity to produce 2 lakh units daily.
Electric car maker Tesla had also announced plans for the country but sources said these have been delayed because of local difficulties.
Hero Motors plans to tie up with a Bangalore-based specialised company to build its own vehicles.