Green vehicles take root with cash incentives

The government’s efforts to drive sales of green vehicles through direct cash incentives appear to have paid off.

47759571NEW DELHI: The government’s efforts to drive sales of green vehicles through direct cash incentives appear to have paid off. Sales more than doubled in April and May, according to industry estimates, after the government started providing cash incentives of 29,000 for bikes and 1.38 lakh for cars.

More than 2,500 electric two-wheelers were sold during the two months, up from about 1,000 in the year-ago period, providing a lease of life to a struggling industry. “There has been an uptick in demand and we have noticed positive customer sentiment in certain markets,” said Ayush Lohia, CEO at Lohia Auto Industries, a prominent two-wheeler manufacturer. “There is a definite improvement in inquiries and we expect the demand to translate into incremental sales in coming months as the incentive policy gets popularised.”

Although India is the largest two-wheeler market for petrol engines, with an annual production of 18 million units, electric two-wheeler segment had been languishing for years with sales of just a few hundred units a month.

This changed with the notification of FAME India – Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India – as part of the National Electric Mobility Mission Plan to promote eco-friendly vehicles. The policy, for which the government has earmarked 795 crore in the first two financial years, covers other vehicles including three-wheelers, buses and light commercial vehicles as well.

The incentive scheme helped home-grown electric carmaker Mahindra Reva, which has the world’s largest production capacity in the segment, to double its monthly sales in the past few months. The company has been able to sell around 200 units of the E20, the new version of the erstwhile Reva electric car.

READ ALSO: FAME-India scheme launched to offer sops on hybrid, e-vehicles

“We are committed to a greener environment and we will constantly work towards educating and encouraging the use of electric vehicles in India,” said Praveen Shan, president and chief executive (automotive) at Mahindra & Mahindra.

“In the first go our monthly sales doubled to 80-100 units per month and once the charging infrastructure and government scheme gets popularised, we are expecting electric cars to get their rightful place in the Indian market,” he added.
The government adopted FAME policy to promote faster switch to electric, hybrid and other green vehicles in order to reduce India’s dependence on largely imported fossil fuels and improve environment by reducing vehicular pollution.

The National Electric Mobility Mission Plan target is to have at least seven million e-vehicles on Indian roads by 2020. The Centre plans to reduce VAT and road tax to the minimum on green vehicles with active participation of state governments.

The spurt in demand also took the world’s largest carmaker Toyota by surprise. It sold more than 280 units of its Camry hybrid sedan in the first 50 days of the year, compared to 720 units sold in the entire 2014.

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