Consumers are now opting for electric and CNG vehicles on their own, Union Minister Nitin Gadkari said. | (Photo: PTI)
Union Minister Nitin Gadkari on Thursday announced that there is no need for subsidies in the electric vehicle (EV) market anymore as consumers are independently choosing to adopt EVs or compressed natural gas (CNG) vehicles.
Speaking at the Bloomberg New Energy Finance (BNEF) Summit, Gadkari said that while initial production costs for electric vehicles were high, increased demand has since led to a reduction in costs, making further financial incentives unnecessary.
“Consumers are now opting for electric and CNG vehicles of their own free will, and I believe that substantial subsidies for electric vehicles are no longer necessary,” the Minister of Road Transport and Highways added.
He also highlighted that GST rates for electric vehicles are lower than those for petrol and diesel vehicles. “In my view, government subsidies for the production of electric vehicles are no longer justified,” Gadkari said.
Currently, electric vehicles are subject to a 5 percent GST, while internal combustion engines are subject to a 28 percent tax.
Government prepares for FAME 3
Union Heavy Industries Minister HD Kumaraswamy on Wednesday mentioned that the government is expected to finalise the third phase of its flagship electric mobility adoption programme, FAME, in the next month or two. He said an inter-ministerial group is reviewing inputs for the programme, working to address challenges faced in the first two phases of the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) plan.
FAME 3 will succeed the temporary Electric Mobility Promotion Plan (EMPS) 2024, which expires in September.
Gadkari’s stance on diesel cars
Earlier this week, at a CII event, Gadkari strongly urged a move away from diesel fuel and asked carmakers to stop production of diesel vehicles. He warned that if production of diesel vehicles continues, he will levy heavy taxes to make it difficult for these vehicles to remain competitive in the market.
First published: September 5, 2024 | 16:04 IS
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