MNRE okays Rs95 crore incentive package for electric vehicles industry
Moneylife Digital Team 22 November 2010

New Delhi: The Society of Manufacturers of Electric Vehicles today said it expects electric two-wheeler market to witness 100% growth following a Rs95-crore incentive package for the remaining part of the 11th Plan, reports PTI.

As per a scheme approved by the ministry of new and renewable energy (MNRE), the government will provide financial incentive for each electric vehicle sold in India during the remaining part of the 11th Plan-2010-11 and 2011-12.

The scheme, effective from 11th November, envisages incentives of up to 20% on ex-factory prices of the vehicles, subject to a maximum limit.

The cap on the incentive will be Rs4,000 for low speed electric two-wheelers, Rs5,000 for high speed electric two-wheelers, Rs60,000 for seven-seater three-wheeler and Rs1 lakh for an electric car.

"This could have an immediate impact on sales of electric two-wheelers. In terms of monthly sales, we expect an immediate doubling of sales," Society of Manufacturers of Electric Vehicles director Sohinder Gill told PTI.

Moreover, those electric vehicle makers who were getting frustrated, will now feel encouraged to grow the market further, he added.

"We have convened a meeting of our members in this week to see how quickly we can pass on the benefits to consumers.

Although these incentives are for the manufacturers to carry out R&D activities and to increase capacities, we will surely pass on partial benefits to the buyers," Gill said.

On an average, electric two-wheelers are priced between Rs25,000 and Rs40,000 depending on the speed range.

As per the notification by the MNRE, the government will take up "dissemination of two wheelers, three wheelers and four wheelers Battery Operates Vehicles (BOV) and R&D and technology demonstration and other activities in the area of Alternative Fuels for Surface Transportation at a total cost of Rs95 crore during the remaining period of the 11th Plan".

For this fiscal, the government will support 20,000 units and 10,000 units of low and high speed two-wheelers respectively, while it will be 80,000 units and 20,000 units in 2011-12.

The government has also decided to incentivise 100 units of three-wheelers and 140 units of passenger cars in the rest of this fiscal, while it will be 166 units and 700 units in the next financial year.

At present, the Indian electric two-wheeler market stands at about 85,000 units annually. Some of the leading electric two-wheeler manufacturers include Hero Electric, Avon Cycles, BSA Motors and Lohia Auto.

In the three-wheeler space, Lohia Auto and Mahindra & Mahindra are present. The four-wheeler market is minuscule with only one player-Mahindra Reva.

MNRE said the manufacturers will have to give at least one year comprehensive warranty, including for batteries, and minimum 30% of the components will have to be indigenous to avail the benefits.

Besides, the companies will have to set up at least 15 service centres across the country to ensure quality and services of the products.

The government will also take up "R&D and technology demonstration projects for various components including battery for 'hybrid electric vehicles', 'plug hybrid electric vehicles', battery operated vehicles and electric/exercise-bike-generator inverter and other such vehicles and their components and activities in this area".

Seeing the potential, some auto majors such as Tata Motors, Mahindra & Mahindra and General Motors are working on to introduce the electric vehicle technology in their existing models across different categories.

Comments
Sridhar S R
1 decade ago
Vijaya Value Electric India Ltd.
No: 10, 2nd Main Road,
R.A. Puram,
Chennai - 28.
Since December 2006, we have manufactured and sold about 8000 electric two wheelers with registered brand Vijaya. We want to know all the procedure for availing the MNRE sops.
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