The electrification of two-wheelers and buses in India has already picked up pace, but the country also wants to become a major market for electric cars by 2030. The target is to have 30 per cent of all cars on the road to be EVs.
Driven by an urge to cut pollution in the cities, enhance national fuel security, and making the country a major global manufacturing hub for electric vehicles, the country has announced several incentives this year to boost the EV sector, ranging from tax cut to allowing sale of electricity as "service" for charging of electric vehicles in a bid to attract investments into charging infrastructure.
Close on the heels of the Union Budget providing tax relief for buying electric vehicles (EVs), the GST Council in its 36th meeting in July cut the tax on EVs from 12 per cent to 5 per cent effective from August 1.
The Council also slashed rate for EV chargers from 18 per cent to 5 per cent making electric vehicle affordable for the buyers.
While the share of electric vehicles out of total annual vehicle sales in the country is less than one per cent, the incentives announced this year has drawn the attention of major car-makers of the world to the potential of the Indian EV market.
In July, when the the Indian auto industry reported one of the worst decline in sales of passenger-vehicles, top players like Tata Motors, Mahindra, Maruti Suzuki and Hyundai revelead their plans for new EV models.
What is more, the swanky e-tron SUV, the first electric vehicle from the German car-maker Audi, has been unveiled in India. The company plans to launch the vehicle in the last quarter of the year. While the company has not yet revealed the price, speculations are rife that it could cost around Rs 1.2 crore, on-road.
Mahindra, the biggest electric car seller in India, terms its eVerito "India's first electric sedan".
South Korean automaker Hyundai in July launched its first electric SUV, KONA electric, in India. Launched at a price of Rs 25.30 lakh, the car promises a driving range of 452 Kilometers in full charge. The price of the vehicle came down to Rs 23,71,858 after the reduced GST rate became applicable from August 1.
Chinese automaker SAIC Motor Corporation Limited's subsidiary MG Motor is also preparing for the launch of electric compact SUV -- ZS � in India next year.
With the availability of a number of other electric vehicles, the consumers in India now have a wide range of choice to adopt environment-friendly transportation mode.
Also to make electric vehicles affordable to consumers, the Union Budget this year said that the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles. This amounts to a benefit of around Rs 2.5 lakh over the loan period to the taxpayers who take loans to purchase electric vehicle.
Noting that it may not be unrealistic to visualise one of the Indian cities emerging as the "Detroit of EVs" in the future, the Economic Survey 2018-19 stated that "appropriate policy measures are needed to lower the overall lifetime ownership costs of EVs and make them an attractive alternative to conventional vehicles for all consumers".
Citing the Ministry of Environment, Forest & Climate Change (2018), the Survey said that in India, transport sector is the second largest contributor to carbon dioxide emissions after the industrial sector.
Road transport accounts for around 90 per cent of the total emissions in the transport sector in India. Given the large import dependence of the country for petroleum products, it is imperative that there should be a shift of focus to alternative fuels to support our mobility in a sustainable manner, it added.
Citing NITI Aayog, the Survey further notes that, in India, electric two-wheelers have been the major part of EV sales with sales of around 54,800 in 2018.
"In India, the limited availability of charging infrastructure seems to be a major impediment to increased adoption of EVS," the survey added.
Under the National Electric Mobility Mission Plan (NEMMP) 2020, there is an ambitious target to achieve six to seven million sales of hybrid and electric vehicles by the year 2020.